Which of the following statements is/are correct?

Real value should not change in the instance of static output cost and unchanged quantities against falling oil prices.
Deflators are to be used separately for inputs and outputs, and this is a practice universally adopted by all economies.

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Question

Which of the following statements is/are correct?

Real value should not change in the instance of static output cost and unchanged quantities against falling oil prices.
Deflators are to be used separately for inputs and outputs, and this is a practice universally adopted by all economies.

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Accepted Answer

Neither 1 nor 2

Explanation: The passage clarifies that under double deflation, if oil prices fall while output prices and quantities remain constant, real value added should remain unchanged—not merely "real value" as Statement 1 claims. Statement 1 is Incorrect: It states "real value" instead of "real value added," misrepresenting the passage's specific reference to deflation methodology. Statement 2 is Incorrect: The passage states "most countries" use double deflation, and explicitly mentions India uses a single deflator—proving the practice is not universal. Therefore, neither statement is correct, making Option 4 the correct answer.

Detailed Explanation:

Question 1 of 1 Meaning in Context

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