question_answer

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

A)  It is the impact of drastic deficiency in supply due to failure ? crops

B)  It is the impact of the surge in demand due to rapid economic growth

C)  It is the impact of the price levels of previous year on re calculation of inflation rate

D)  None of the statements [a], [b] and [c] given above are correct this context