Which of the following assumptions is/are valid?
- 1.Deflation strategies can be used to make manufacturers appear to be doing better than they actually are.
- 2.When input and output prices are both deflated against a single input price, it is referred to as ‘double deflation’.
Select the answer using the code given below.
Answer & explanation
Answer: (a) 1 only
The passage shows that using one deflator for inputs and outputs can make a manufacturer look more productive than it is, so the choice of deflation method can flatter performance. Statement 2 inverts the definition: double deflation deflates input and output prices separately.
- ✓ 1. With a single deflator 'it would look as if the manufacturer had become more productive' — the method of deflation can make performance look better than it is.
- ✗ 2. Double deflation is where 'input and output prices are deflated separately'; using a single deflator is the Indian practice the passage criticises.
Remember · Definition-based statements: check the definition in the passage exactly; a reversed definition is always invalid.
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). ·