Economics · Indian Economy - Inflation
Which of the following factors primarily contributes to cost-push inflation rather than demand-pull inflation in an economy?
- 1An increase in the total money supply circulating through the banking system.
- 2An increase in indirect taxation and fluctuations in industrial or agricultural output.✓
- 3A reduction in interest rates by the central bank leading to easy credit.
- 4A sudden increase in overall consumer spending and public expenditure.
Correct answer
An increase in indirect taxation and fluctuations in industrial or agricultural output.
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