Question

Study the relationship in the first pair of words and complete the second pair:

Creeping inflation: 2% to 3%

Running inflation: ______

Options

• 8% to 9%

• 8% to 20%

• 3.3% to 8%

• 20% to 40%

Answer 1

Running inflation: 8% to 20%

Explanation:

Creeping inflation occurs when prices rise at a rate of 2 to 3 per cent each year. This sort of inflation is regarded as beneficial since it boosts consumer demand, which drives economic growth. Running inflation occurs when prices increase at a quick rate of 8 to 20% per year. This kind of inflation has a huge negative impact on the poor and middle classes. Its management necessitates aggressive monetary and fiscal policies.