Economic Awareness - Sectors of Indian Economy
Which of the following best describes demand-pull inflation?
Which of the following best describes demand-pull inflation?
easy Q3 of 15
Step-by-Step Solution
Step 1: Understand types of inflation
Demand-pull inflation occurs when aggregate demand exceeds aggregate supply, pushing prices up.Step 2: Analyze options
Inflation caused by excess demand over supply correctly defines demand-pull inflation. Inflation caused by rising production costs describes cost-push inflation. Government price controls and decrease in money supply do not cause demand-pull inflation.Final Answer:
Inflation caused by excess demand over supply → Option AQuick Check:
Demand-pull inflation = excess demand causes price rise ✅
Quick Trick: Demand-pull = demand exceeds supply causing inflation.
Common Mistakes:
- Confusing demand-pull with cost-push inflation.
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