Passage (Deflation—as above). Which of the following assumption/assumptions is/are valid? 1. Deflation strategies can be used to portray the manufacturers' performance to look better than what they actually are doing. 2. When a single input price is deflated for both inputs and outputs prices, then it is called 'double deflation'.

Statement 1 is a valid assumption from the passage—using the same deflator for inputs and outputs makes the manufacturer appear more productive than they actually are, supporting that deflation methods can be used to portray performance favourably. Statement 2 is incorrect—'double deflation' is when inputs and outputs are deflated SEPARATELY using different deflators, not when a single deflator is used for both. Hence only 1 is valid.