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Question No. 366Interactive Test Mode
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Q366. A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?

A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?

Select the correct option below (or cross out options to eliminate)

Official Answer Key & Detailed Solution

Ready to check the official UPSC Answer Key?

Click any option above to test yourself under exam conditions, or reveal the explanation directly.

Official UPSC Answer KeyUPSC Prelims 2011 • Indian Economy

Correct Answer: Option (C) — It is the impact of the price levels of previous year on the calculation of inflation rate

Concept & Option Breakdown

Standard Reference Verified

The base effect refers to the impact of the price level in the corresponding period of the previous year on the headline inflation rate calculation. If the price index was unusually low in the base period, even a modest rise in the current index can result in a high percentage inflation rate.

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2011 (Q366)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Banking & Financial System
Official Answer KeyOption (C) — It is the impact of the price levels of previous year on the calculation of inflation rate

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Frequently Asked Questions — UPSC Prelims 2011 Q366

What is the official answer for UPSC Prelims 2011 GS Paper I Question 366 (Indian Economy)?

The official UPSC answer key for this 2011 Indian Economy (Banking & Financial System) question is Option (C): "It is the impact of the price levels of previous year on the calculation of inflation rate". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2011 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Banking & Financial System". You can explore all repeated questions from Banking & Financial System in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Banking & Financial System UPSC Prelims question using option elimination?

To solve Banking & Financial System questions in UPSC Prelims, identify extreme modifiers, verify core NCERT conceptual definitions, and eliminate mutually contradictory statement pairs before locking your final option.

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