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Which is better: inflation or deflation?

Inflation is better than deflation. Deflation completely ruins the economy, whereas moderate levels of inflation helps in the growth of the economy, it leads to more investments, production and employment. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

Deflation on the other hand, leads to loss of production, investments, and leads to unemployment.

Further readings:

  1. RBI – Know About Reserve Bank of India, Functions, Composition
  2. Monetary Policy Committee (MPC) – An Overview, Instruments of Monetary Policy

Related Links

Consumer Price Index (CPI) – Types of CPI, Calculation of CPI – Indian Economy Notes

Inflation Targeting: Methods, Drawbacks and Benefits

Previous Years Economy Questions in UPSC Mains General Studies Paper – 3

Cashless Economy in India – UPSC GS-III Notes

Monetary Policy – Objectives, Roles and Instruments (UPSC Indian Economy)

Union Budget 2021 – An Overview of Proposals on Six Different Pillars

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