Match the types of inflation and price dynamics listed in List-I with their corresponding macroeconomic characteristics listed in List-II. Which of the following pairings correctly aligns each inflation type with its defining mechanism?
- SkewflationPersistent price surges concentrated in a specific sector or commodity group while prices in other sectors remain stable or decline.
- Bottleneck InflationPrice increases resulting from severe structural supply chain disruptions while aggregate demand remains relatively unchanged.
- Core InflationLong-term underlying price trend measured by stripping out volatile components such as food and energy prices.
- Repressed InflationPrice stability artificially maintained through administrative price controls and rationing despite underlying excess market demand.
Answer
Skewflation pairs with persistent price surges in a specific sector (right_2); Bottleneck Inflation pairs with structural supply chain disruptions (right_1); Core Inflation pairs with underlying price trends excluding food and energy (right_3); Repressed Inflation pairs with artificial price stability maintained via price controls (right_4).
Each inflation type is mapped accurately based on its underlying macroeconomic cause and measurement approach: Skewflation represents sectorally uneven price rise; Bottleneck Inflation is caused by supply interruptions; Core Inflation measures non-volatile price trends; and Repressed Inflation is caused by price control policies.
Step-by-Step Solution
Key Concept
Classification of Inflation Dynamics and Price Controls