economics hard Fill in the Blank

The economic phenomenon where inflation remains persistently high in specific sectors like food and energy, while remaining stable or falling in other sectors, is referred to as ___.

  1. 3.5
  2. long
  3. Population
  4. Skewflation

Answer: Skewflation

Skewflation poses a unique challenge for central banks because standard monetary tightening (raising interest rates) might successfully curb general demand but fail to address supply-side bottlenecks in specific sectors like agriculture. This can lead to a situation where raising rates unnecessarily stifles overall economic growth without solving the targeted inflation.

Topic Macroeconomics - Inflation
Exam Relevance UPSC Prelims, SSC CGL
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