Which of the following statements is/are correct?
- 1.Real value should not change in the instance of static output cost and unchanged quantities against falling oil prices.
- 2.Deflators are to be used separately for inputs and outputs, and this is a practice universally adopted by all economies.
Select the answer using the code given below.
Answer & explanation
Answer: (d) Neither 1 nor 2
Statement 1 looks like a paraphrase but changes two terms: the passage holds output prices (not output cost) steady and speaks of real value added (not real value). Statement 2 turns 'most countries' into 'all economies', which India itself contradicts.
- ✗ 1. The passage's example keeps output prices unchanged while oil (an input) gets cheaper — so the cost of producing output actually falls. It says real value added, not 'real value', stays the same. The statement misstates both terms.
- ✗ 2. The passage says 'Most countries' use double deflation and notes India uses the same deflator for inputs and outputs, so it is not universal.
Remember · Compare near-copy statements word by word; 'price' vs 'cost' and 'most' vs 'all' decide such items.
Question and answer: UPSC's provisional GS Paper II (2026, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·