SSC CGL 17 Aug 2021 Shift 3 Paper

Question : 27 of 100

Marks: +1, -0

Which of the following statements is related to positive economics?

An increase in money supply implies a price rise in an economy.
Inequalities in the distribution of wealth and incomes should be reduced.
Inflation is better than deflation.
More production of luxury goods is not good for a less developed country.

Solution:

Positive economics is an objective stream of economics that relies on facts, what has happened and what is currently happening in a given economy. Accordingly, it states an increase in money supply implies a price rise in an economy

(P=M N \/ T)

. Money supply means the total amount of money in circulation or in existence in a country. Increasing the money supply faster than the growth, will cause inflation.

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