A rise in the general level of prices may be caused by: 1. an increase in the money supply 2. a decrease in the aggregate level of output 3. an increase in the effective demand Select the correct answer using the codes given below.

QUESTION

Easy

Economy

Prelims 2013

A rise in the general level of prices may be caused by:

Select the correct answer using the codes given below.

Select an option to attempt

Explanation

It a direct application based question.

1st statement is correct as increase in money supply will cause inflation.

2nd and 3rd statement are obviously correct as they represent supply and demand side of products.

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