ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cost-push inflation
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Demand-pull inflation
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Price-push inflation
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Supply-pull inflation
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None of the answers
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Detailed explanation-1: -Demand-pull inflation explains rising prices in an economy as the result of increased aggregate demand that surpasses supply. As consumers demand more given limited supply, prices are bid higher.
Detailed explanation-2: -Increase in public spending, hoarding, tax reductions, price rise in international markets are the causes of inflation. These factors lead to rising prices. Also, increasing demands causes higher prices which leads to Inflation.
Detailed explanation-3: -The excess demand puts upward pressure on prices across a broad range of goods and services and ultimately leads to an increase in inflation – that is, it ‘pulls’ inflation higher.
Detailed explanation-4: -Monetary Inflation Theory: According to this theory, the increase in prices is due to the excessive supply of money in the market. This causes the value of money to drop, and the prices go up.
Detailed explanation-5: -A strong economy. Supply shortfalls. A rapid increase in the supply of money. Inflation expectations. Government policy. 21-Jul-2022