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Name the type of inflation which is developed because of fewer goods being produced, while the demand remains consistent.
  • a)
    Demand pull inflation
  • b)
    Cost push inflation
  • c)
    Galloping inflation
  • d)
    Stagflation
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Name the type of inflation which is developed because of fewer goods ...
Cost-push inflation develops because the higher costs of production factors decreases in aggregate supply (the amount of total production) in the economy. Because there are fewer goods being produced (supply weakens) and demand for these goods remains consistent, the prices of finished goods increase (inflation).
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Name the type of inflation which is developed because of fewer goods being produced, while the demand remains consistent.a)Demand pull inflationb)Cost push inflationc)Galloping inflationd)StagflationCorrect answer is option 'B'. Can you explain this answer?
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