A rise in general level of prices may be caused by
- an increase in the money supply
- a decrease in the aggregate level of output
- an increase in the effective demand
Select the correct answer using the codes given below.
[UPSC Civil Services Exam – 2013 Prelims]
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Answer: (d)
Explanation:
The increase in the general level of prices may be caused by many factors like an increase in the money supply, a decrease in the aggregate level of output, an increase in the effective demand, an increase in income, the rapid growth of population, etc.