A rapid increase in the rate of inflation is sometimes attributed to the ldquo base effect rdquo Wha...........

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

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

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

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

It is related with Minimum support prices.

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

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