UPSC Exam > UPSC Questions > What is reflation?a)A situation of rising inf...
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What is reflation?
- a)A situation of rising inflation
- b)A situation of falling inflation
- c)A situation deliberately brought by the government to reduce unemployment and increase demand
- d)A situation of constant inflation
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
What is reflation?a)A situation of rising inflationb)A situation of fa...
Reflation is a situation often deliberately brought by the government to reduce unemployment and increase demand by going for higher levels of economic growth.
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What is reflation?a)A situation of rising inflationb)A situation of fa...
Reflation
Reflation is a situation deliberately brought about by the government to reduce unemployment and increase demand. It involves stimulating the economy through various measures to boost economic activity.
Key Points:
- Reflation typically involves a combination of fiscal and monetary policies aimed at increasing consumer spending, business investment, and overall economic growth.
- The government may increase public spending, cut taxes, or lower interest rates to encourage borrowing and spending.
- By injecting more money into the economy, reflation aims to create jobs, support businesses, and ultimately stimulate growth.
- Reflation is often used during periods of economic downturn or recession to jumpstart the economy and prevent a prolonged period of low growth or deflation.
- However, reflation can also lead to inflation if not carefully managed, as excess demand may push up prices.
In conclusion, reflation is a deliberate effort by the government to stimulate economic activity and boost growth by increasing demand and reducing unemployment. It is a tool used to counter economic downturns and support overall economic recovery.
Reflation is a situation deliberately brought about by the government to reduce unemployment and increase demand. It involves stimulating the economy through various measures to boost economic activity.
Key Points:
- Reflation typically involves a combination of fiscal and monetary policies aimed at increasing consumer spending, business investment, and overall economic growth.
- The government may increase public spending, cut taxes, or lower interest rates to encourage borrowing and spending.
- By injecting more money into the economy, reflation aims to create jobs, support businesses, and ultimately stimulate growth.
- Reflation is often used during periods of economic downturn or recession to jumpstart the economy and prevent a prolonged period of low growth or deflation.
- However, reflation can also lead to inflation if not carefully managed, as excess demand may push up prices.
In conclusion, reflation is a deliberate effort by the government to stimulate economic activity and boost growth by increasing demand and reducing unemployment. It is a tool used to counter economic downturns and support overall economic recovery.
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What is reflation?a)A situation of rising inflationb)A situation of falling inflationc)A situation deliberately brought by the government to reduce unemployment and increase demandd)A situation of constant inflationCorrect answer is option 'C'. Can you explain this answer?
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