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Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
- UGC NET
- Economics
Which of the following effects do not work in the direction of reducing inflationary gap ? 1. (1) income redistribution effect (2) foreign trade effect (3) pigo
Which of the following effects Do Not work in the direction of reducing inflationary gap ? 1. (1) Income Redistribution effect (2) Foreign trade effect (3) Pigou effect ) Marshali effect
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Nidhi taparia![best-answer]()
Hi. I'm sorry that you have had to post this question multiple times and I haven't been able to answer. The reason is that this question seems very confusing in the first place. Firstly, income redistribution is actually an effect of inflation itself. So whenever we talk about income redistribution, we talk about it as the effect and inflation being the cause. Not the other way round. Secondly, I haven't come across Marshall effect anywhere as such. I tried googling, but couldn't find it anywhere. Thirdly, Pigou effect, also called the real balance effect, also shows how inflation affects employment and output. Not the other way round. So clearly, something seems to be wrong in this question. That is why I didn't answer it earlier.