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UPSC 2021: With reference to Indian economy, demand-pull inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. Inflation-indexing wages 4. Higher purchasing power 5. Rising interest rates Select the correct answer using the code given below.
(a)1, 2 and 4 only
(b)3, 4 and 5 only
(c)1, 2, 3 and 5 only
(d)1, 2, 3, 4 and 5
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Not attemptedCorrect Answer: (a) 1, 2 and 4 only
Demand for a good rises when the price of its substitute increases (1) and when its own price falls (4). If the price of a complement rises (2) demand falls, and if income rises for an inferior good (3) demand falls; therefore 2 and 3 are incorrect. Hence only 1 and 4 are correct. ([iasuniverse.com](https://www.iasuniverse.com/answers-with-explanation-upsc-prelims-gs1-paper-2021/?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2021 Indian Economy question?▼
The correct answer is option (a): 1, 2 and 4 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this National Income & Economic Growth question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2021, GS Paper 1, as Question 12. It falls under Indian Economy > National Income & Economic Growth.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from National Income & Economic Growth?▼
UPSC has asked 36 questions from National Income & Economic Growth (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.