UPSC Civil Services 2011 Prelims General Studies Paper I

Question : 13 of 100

Marks: +1, -0

A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?

It is the impact of drastic deficiency in supply due to failure of crops
It is the impact of the surge in demand due to rapid economic growth
It is the impact of the price levels of previous year on the calculation of inflation rate
None of the statements (a), (b) and (c) given above is correct in this context

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