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Inflation is a situation characterised by
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- Too much money chasing too few goods
- Too few money chasing too much goods
- Too many people chasing too few goods
- Too many people chasing too little money
- Too much money chasing too few goods
Correct Option: A
Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve. This is commonly described as “too much money chasing too few goods.”
