Fill in all the gaps, then press "Check" to check your answers. You have 8 minutes to attempt this exercise.
a. Inflation caused due to rise in cost of production is known as demand pull inflation.
b. An increase in the level of domestic savings is likely to reduce country's inflation rate.
c. Expectations of rising inflation rates do not add to inflationary pressures in the economy.
d. Retail price index includes a basket of goods from various sectors of the economy.
e. A large increase in the price paid for imports by domestic producers has little or no impact on the level of inflation.
f. Demand inflation occurs when the total supply of goods and services is insufficient to meet aggregate demand in the economy.
g. Inflationary pressures in the economy could be reduced by a deficit budget.
h. Cost-push inflation is characterised by rising production costs.
i. Inflation causes the real income of workers to go down.
j. High levels of inflation can reduce a country's international competitiveness.