Question
Which of the following statements is/are correct?
Select the correct answer using the codes given below
- If a country is experiencing an increase in its per capita GDP, its GDP must necessarily be growing.
- If a country is experiencing negative inflation its GDP must be decreasing.
Select the correct answer using the codes given below
Answer: Option B
Answer: (b)
Negative Inflation is a decrease in price level and economic growth is defined as GDP rise. A decrease in inflation means the prices have fallen.
So, there is an increase in purchasing power of money. It is increased consumption therefore GDP increases.
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Answer: (b)
Negative Inflation is a decrease in price level and economic growth is defined as GDP rise. A decrease in inflation means the prices have fallen.
So, there is an increase in purchasing power of money. It is increased consumption therefore GDP increases.
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