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    Question

    The rise in the prices which is caused due to reduction

    in the supply of goods and services in the economy is called 
    A Supply-side inflation Correct Answer Incorrect Answer
    B Recessionary gap Correct Answer Incorrect Answer
    C Inflationary gap Correct Answer Incorrect Answer
    D Demand-side inflation Correct Answer Incorrect Answer

    Solution

    Supply-side inflation occurs when prices increase due to a decrease in the supply of goods and services. This can happen due to factors such as higher production costs, shortages of key inputs, or disruptions in the supply chain. Unlike demand-side inflation, which is driven by increased demand, supply-side inflation is primarily caused by supply constraints.

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