Question

What does the given statement means : "inflation is generally pro-cyclical"
A) "higher rates of inflation tend to proceed periods of high economic growth. "
B) "THE rate of inflation tends to rise in periods of high economic growth and fail in periods of low economic growth ".
C)"prices on average rise in an economic expansion but fall after a business cycle peak".
D) "more inflation results in less capacity utilisation. "

Answer 1

may be b is the right answer

Answer 2

From the statement that inflation is pro cyclical it means that the inflation tends to rise in periods of high economic growth and fail in periods of low economic growth, this means that inflation is not fixed and it tends to come and go, it should be noted that a stable economy experiences minimal or no inflation