Inflation

Question 1

Inflation

Answer 1

Inflation is persistent rise in the average price of goods of services

Question 2

Deflation

Answer 2

Deflation is negative inflation: fall in price

Question 3

Disinflation

Answer 3

Disinflation is reduction in rate of inflation

Question 4

Stagflation

Answer 4

Stagflation is combination of inflation and rising unemployment due to recession

Question 5

Reflation

Answer 5

Reflation is when inflation returns after a spell of deflation and recession thus showing growth is back

Question 6

Open Inflation

Answer 6

Open inflation is when govt does not manage the inflation through subsidies, fiscal and monetary policies

Question 7

Suppressed Inflation

Answer 7

Suppressed inflation: When inflation is managed by fiscal and monetary policies that is inflation is there but govt is keeping it under check
Also called hidden inflation

Question 8

Creeping Inflation

Answer 8

Creeping inflation is Up-to 4%

Question 9

Trotting Inflation

Answer 9

Trotting inflation is 5-10%

Question 10

Galloping Inflation

Answer 10

Galloping is 10-20%

Question 11

Runaway Inflation

Answer 11

Runaway is between Galloping and Hyper inflation

Question 12

Hyperinflation

Answer 12

Hyperinflation requires a monthly inflation of 20-30 %

C

Question 13

Cost Push Inflation

Answer 13

Cost Push inflation is also known as supply shock

Question 14

Structural Inflation

Answer 14

Structural inflation is a type of persistent inflation due to certain deficiencies in economy

Question 15

Structural inflation constraints

Answer 15

• Leakage in PDS
• inefficient distribution: Duplicity and ghost beneficiaries
• Monopoly of APMC
• Inability of agriculture sector to respond to increased demands for certain portion due to MSP
• poor storage conditions

Question 16

Fiscal Measures to control inflation

Answer 16

FM- reduction in indirect taxes

Question 17

Monetary measures to combat inflation

Answer 17

MM- Repo and reverse repo, CRR, SLR, MSF, OMO

Question 18

Administrative measures to combat inflation

Answer 18

AM- Essential commodities act, dishoarding, anti black marketing measures

Question 19

GDP Deflator

Answer 19

Ratio of nominal to real GDP

- Measures of inflation

Question 20

Producer Price Index (PPI)

Answer 20

Measures the change in prices received by a producer

Question 21

Order of price indexes

Answer 21

PPI > WPI > CPI

Question 22

Philips Curve

Answer 22

Inverse relationship b/w rate of inflation and rate of unemployment

Question 23

Repressed Inflation

Answer 23

• Repressed inflation is when govt interrupts a price rise through measures like price control and rationing.
• Distribution system is based on govt control

Question 24

Golder Committee

Answer 24

In 2014 introduced Producer Price Index

Question 25

Urjit Patel committee

Answer 25

UP- ideal inflation is 4% +-2%

Question 26

Chakravarty Committee

Answer 26

CVC- Ideal inflation is 4%

Question 27

Chandrasekhar Committee

Answer 27

Service Price Index

Question 28

Wholesale Price Index WPI

Answer 28

WPI By- office of Economic Advisor (OEA), Department of Industrial Policy and Promotion (DIPP) Base Year- 2011-12 Composition: Mfd products-64% (Basic metals > mfd food) Primary Articles- 23% (food>non food> minerals) Fuel & Power - 13% (Mineral oil > Electricity > Coal) No SERVICE and UNORGANISED sector

Question 29

Index of eight Core Industries (ICI)

Answer 29

ICI By- Office of Economic Advisor , Department of Industrial Policy and Promotion (DIPP) Type: Eight core industries Base Year: 2011-12 Composition: Petroleum refinery (28%)> Electricity (20%) > Steel (18%) > Coal (10%) > Crude Oil (9%) > Natural Gas (7%) > Cement (5%) > Fertilizer (3%)

Question 30

Index of Industrial Production (IIP)

Answer 30

IIP By- Central Statistical Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI) Base Year- 2011-12 Composition: Mfg (78%) > Mining (14%) > Electricity (8%)

Question 31

Consumer Price Index (CPI)

Answer 31

- Rural, Urban, Combined By: Central Statistical Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI) - Housing not covered in Rural

Question 32

CPI labour

Answer 32

By labour Bureau Base year: Agri Labour- 1986-87 Rural Labour- 1986-87 Industrial Worker- 2016

Question 33

Experiment Business service price Index (BSPI)

Answer 33

BSPI By-OEA, DIPP Monthly: Railway/Banking/Air/Portal Quarterly: Insurance/Telecom Yearly: Port

Question 34

Nikkei Purchasing Managers Index (PMI)

Answer 34

By: Nikkei Japan

Question 35

RESIDEX

Answer 35

RESIDEX By- National Housing Board (NHB) Base Year: 2017-18 Quarterly: 50 cities

Question 36

Housing Price Index

Answer 36

HPI By- RBI Base year- 2010-11 Quarterly: 10 cities

Question 37

GDP Deflator

Answer 37

GDP Deflator | By- CSO MoSPI

Question 38

Cost of Inflation Index

Answer 38

By- Central Board of Direct Taxes (CBDT), Ministry of Finance