Which of the following is NOT a type of inflation based on speed?
A. Walking inflation
B. Demand-pull inflation
C. Galloping inflation
D. Creeping inflation
Answer: Option B
Solution (By JKSSB Mock Tests)
Demand-pull inflation is a classification based on cause. Based on speed/intensity, inflation is classified as creeping, walking, running and galloping (or hyperinflation).
Explanation:
In Dornbusch’s overshooting model, sticky goods prices cause the exchange rate to jump more than proportionally to a monetary shock in the short run so that uncovered interest parity can hold.
Explanation:
On the balanced-growth path of the Solow model, aggregate capital, output and effective labour grow at the exogenous rate of technological progress plus population growth, so that capital and output per effective worker are constant.
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