Which factors could contribute to stagflation? 1. High inflation (Govt spending). 2. Decline in industrial production/growth. 3. Decrease in demand. 4. Appreciation of currency.

Only 1 and 2

Only 2 and 3

Only 1, 3 and 4

1, 2, 3 and 4

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BPSC Prelims

2023 • 30 Sep, 2023 • General

Which factors could contribute to stagflation? 1. High inflation (Govt spending). 2. Decline in industrial production/growth. 3. Decrease in demand. 4. Appreciation of currency.

Correct Answer

1, 2, 3 and 4

Stagflation: Stagnation (Low growth/High unemployment) + Inflation. Factors: - High Inflation (1). - Low Growth/Industrial decline (2). - Low Demand (......

💡 Analysis & Explanation

Stagflation ▼

Stagnation (Low growth/High unemployment) + Inflation.

Factors ▼

- High Inflation (1).
- Low Growth/Industrial decline (2).
- Low Demand (contributes to stagnation) (3).
- Appreciation reduces exports -> Low growth (4).

Answer ▼

All can contribute to the complex scenario of Stagflation.

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Which factors could contribute to stagflation? 1. High inflation (Govt spending). 2. Decline in industrial production/growth. 3. Decrease in demand. 4. Appreciation of currency.