It has been generally viewed that when an economy grows beyond its potential growth rate, it causes inflation. How does growing faster than the potential rate cause inflation?
[A]Fast growth causes quick resource utilization to fulfill the higher demand
[B]Fast growth causes more employment opportunities which leads to rise in prices
[C]Fast growth causes more productivity which leads to higher supply and cost push inflation
[D]All of above mentioned reasons
Ans-A
[A]Fast growth causes quick resource utilization to fulfill the higher demand
[B]Fast growth causes more employment opportunities which leads to rise in prices
[C]Fast growth causes more productivity which leads to higher supply and cost push inflation
[D]All of above mentioned reasons
Ans-A
No comments:
Post a Comment