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. ​

CollectorBabu · Accepted Answer

Correct Answer: 1, 2 and 4 only ​. Statements 1,2 and 4 are correct:  Demand-pull inflation is the upward pressure on prices that follows a shortage in supply. In Indian Economy demand - pull Inflation can be caused/increased by Expansionary Policies, Fiscal Stimulus and Higher Purchasing Power. Higher interest rate pulls out or restricts the supply of money in the economy and is a method to control inflation.

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.

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