UPSC Express

Q7. Which of the following situations give rise to inflation?
1. When general level of prices of goods and services rises. 2. When general level of prices of goods and services falls. 3. When purchasing power of the currency decreases.
4. When purchasing power of the currency increases.

Select the correct answer using the code given below:
A. 1 and 3 only
B. 1 and 4 only
C. 2 and 3 only
D. 2 and 4 only

Answer: A
Exp: Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of the currency is falling