Question

Which of the following statements is/are correct?

1.An increase in GDP can be a result of an increase in demand for goods and services, which can contribute to demand-pull inflation.

2.A decline in aggregate demand can lead to stagflation by reducing economic growth.

Select the correct answer using the code given below:

A Only 1 Correct Answer Incorrect Answer
B Only 2 Correct Answer Incorrect Answer
C Both are correct Correct Answer Incorrect Answer
D None of the above Correct Answer Incorrect Answer

Solution

Both are correct statements.

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