UPSC Prelims Marathon 24 July – Inflation and Business Cycle (Part II) – 2025

With reference to Structural (Bottleneck) Inflation in India, consider the following statements:
1.Structural inflation is primarily demand-driven and arises due to excessive consumer spending in the economy.
2.It is caused by a mismatch between rising demand and inadequate supply due to lack of investible capital.
3.Higher government expenditure in non-developmental areas contributes to low growth and persistent inflation.
Which of the statements given above is/are correct?

With reference to the economic phases of Recovery, Expansion, and Boom, consider the following statements:
1.Recovery marks the turnaround of the economy after a recession, characterized by low prices and increasing production.
2.Expansion is the final stage of the business cycle, occurring just before a trough.
3.Boom is a phase of high GDP growth and commercial activity, typically following the recovery phase.
Which of the statements given above is/are correct?

With reference to a Double-Dip Recession, consider the following statements:
1.A double-dip recession refers to two consecutive quarters of negative GDP growth within the same business cycle.
2.It typically involves a brief recovery followed by another downturn, often worsened by reduced consumer demand and spending cutbacks.
Which of the statements given above is/are correct?