Question
The rise in the prices which is caused due to reduction
in the supply of goods and services in the economy is calledÂSolution
Supply-side inflation occurs when prices increase due to a decrease in the supply of goods and services. This can happen due to factors such as higher production costs, shortages of key inputs, or disruptions in the supply chain. Unlike demand-side inflation, which is driven by increased demand, supply-side inflation is primarily caused by supply constraints.
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