New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    The aggregate demand in an economy severely outweighs

    the aggregate supply, is a situation occurs in which type of inflation in the economy?
    A Cost Push Inflation Correct Answer Incorrect Answer
    B Demand - Pull Inflation Correct Answer Incorrect Answer
    C Hyperinflation Correct Answer Incorrect Answer
    D Built-In inflation Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Demand Pull Inflation is a situation in which the increase in aggregate demand strongly outweighs the aggregate supply in the economy. It is when the product is highly demanded by the consumers and there is a shortfall in the production. The prices go up.

    Practice Next