Fall in the rate of inflation implies fall in the price level.

True

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False

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Solution

The correct option is B
False

Fall in the rate of inflation doesn’t imply fall in the price level. It only reflects the increase/decrease in the pace of inflation.

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Similar questions

(I) Deflation is a decrease in the general price level of goods and services. It occurs when the inflation rate falls below 0%.

(II) Disinflation is the same phenomenon as deflation.

0

List - I (Type of Inflation)	List - II (Characteristic)
A. Demand-pull Inflation	1. Initially price rises
B. Cost-push Inflation	2. Price-rise controlled by rationing and other means
C. Suppressed Inflation	3. Inflation in which prices increase as a result of increased production costs, as labour and raw materials, even when demand remains the same
D. Creeping Inflation	4. Inflation in which rising demand results in a rise in prices. 5. Fall in price of raw materials

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