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Inflation may occur if there is?

Economics
WAEC 2015

Inflation may occur if there is?

  • A. excess supply over demand
  • B. increase in productivity
  • C. excessive demand with limited supply
  • D. increased government spending in a depressed economy
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Correct Answer: Option C
Explanation

excessive demand with limited supply;  it causes rise in prices and increases in equalities: Generally, excess demand results in inflation (continuous rise in prices) without increase in output and employment. people will be will to pay high prices for few goods. which is generally what in flation is about. a fall in the purchasing power of money as more money will be chasing few goods


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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
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