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UPSC Economics Business and Foreign Trade / व्यापार और विदेश व्यापार Question Bank Money Supply and Indian Financial System

  • question_answer
          What are the causes of inflation?
    1. Increase in demand for goods & services
    2. Decrease in the supply of goods & services
    3. Decrease in demand for goods & services           
    4. Increase in the supply of goods & services
    Choose the correct code.

    A) 1 and 2           

    B)        3 and 4

    C) 1 and 4           

    D)        2 and 3

    Correct Answer: A

    Solution :

    The inflation occurs due to two main factors:
    (i) Increase in demand for goods & services
    (ii) Decrease in the supply of goods & services


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