The period during which the inflation rate remains within a certain range-

Question

Question

This question was previously asked in

RPF SI (2018) Official Paper (Held On : 16 Jan 2019 Shift 2)

Answer 1

The correct answer is Inflation Interval

Key Points

Inflation Interval refers to the period during which the inflation rate remains within a certain range.
It is a critical economic indicator monitored by governments and central banks to manage economic policies effectively.
Unlike Inflation Tax, which is a theoretical concept describing the erosion of purchasing power due to inflation, the Inflation Interval is a practical measure used in economic planning.
Understanding the Inflation Interval helps in making informed decisions about fiscal and monetary policies to ensure economic stability.

Additional Information

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.
Inflation is measured using various indices such as the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).
High inflation can lead to uncertainty in the economy, affecting investments and savings, while deflation can lead to decreased consumer spending, impacting economic growth.
Government policies, including interest rate adjustments and fiscal measures, are often designed to keep inflation within a target range or interval.