With reference to Indian economy, demand-pull inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. Inflation-indexing wages 4. Higher purchasing power 5. Rising interest rates Select the correct answer using the code given below.
Question:
With reference to Indian economy, demand-pull inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. Inflation-indexing wages 4. Higher purchasing power 5. Rising interest rates Select the correct answer using the code given below.
With reference to Indian economy, demand-pull inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. Inflation-indexing wages 4. Higher purchasing power 5. Rising interest rates Select the correct answer using the code given below.
Options
Answer: 1, 2 and 4 only
Explanation:
Expansionary and fiscal policies increase aggregate demand, while higher purchasing power boosts consumption. Rising interest rates reduce demand, so they do not contribute to demand-pull inflation.
Explanation:
Expansionary and fiscal policies increase aggregate demand, while higher purchasing power boosts consumption. Rising interest rates reduce demand, so they do not contribute to demand-pull inflation.
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