UPSC Prelims 2021 · GS Paper 1 · Q82

Economy

Medium · Demand-pull inflation

Which of the following can lead to demand-pull inflation in an economy?

1. Expansionary monetary policy that increases the money supply

2. Fiscal stimulus that raises government expenditure

3. Wage indexation that automatically adjusts wages to inflation

4. A general rise in the purchasing power of consumers

Select the correct answer using the code given below.