UPSC Prelims 2011·GS1·economy·basic concepts

Economic growth is usually coupled with

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Last updated 23 May 2026, 3:31 pm IST
  1. ADeflation
  2. BInflationCorrect
  3. CStagflation
  4. DHyperinflation

Explanation

The correct answer is B because economic growth typically leads to an increase in demand for goods and services. When the economy grows, consumer income and spending rise, which puts upward pressure on prices. A moderate level of inflation is generally considered a sign of a healthy, growing economy as it encourages production and investment. In contrast, deflation usually signifies a shrinking economy, stagflation represents a stagnant economy with high prices, and hyperinflation indicates a total collapse of currency value. Therefore, mild inflation is the standard companion to steady economic growth.
economy: Economic growth is usually coupled with
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