Regarding the concept of inflation, consider the following statements:

Hyperinflation occurs when inflation rates exceed 50% per month.

Deflation is a decrease in the general price level of goods and services.

Stagflation is characterized by high inflation and high employment.

How many of the above statements are correct?

Question

Hyperinflation occurs when inflation rates exceed 50% per month: Correct. Hyperinflation is an extreme form of inflation, often leading to a loss of currency value.
Deflation is a decrease in the general price level of goods and services: Correct. Deflation can lead to reduced consumer spending and economic slowdown.
Stagflation is characterized by high inflation and high employment: Incorrect. Stagflation presents a dilemma for economic policy as it combines inflation with high unemployment.

GKToday Admin · Accepted Answer

Only two

Hyperinflation occurs when inflation rates exceed 50% per month: Correct. Hyperinflation is an extreme form of inflation, often leading to a loss of currency value.
Deflation is a decrease in the general price level of goods and services: Correct. Deflation can lead to reduced consumer spending and economic slowdown.
Stagflation is characterized by high inflation and high employment: Incorrect. Stagflation presents a dilemma for economic policy as it combines inflation with high unemployment.

Current Affairs