Question : What is a moderate degree of controlled inflation called?
Option 1: Reflation
Option 2: Stagflation
Option 3: Hyper-inflation
Option 4: Disinflation
Correct Answer: Reflation
Solution : The correct answer is Reflation.
The term reflation refers to a modest level of controlled inflation. It is simply the process of boosting the economy following a drop in the economic cycle, either by raising the money supply or by lowering taxes, to return the economy (particularly the price level) to a long-term trend. It denotes deliberate expansionary attempts to avert a price drop or to support price recovery after a price drop.
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