Question

    Which of the following statements is/are correct?

    1.An increase in GDP can be a result of an increase in demand for goods and services, which can contribute to demand-pull inflation.

    2.A decline in aggregate demand can lead to stagflation by reducing economic growth.

    Select the correct answer using the code given below:

    A Only 1 Correct Answer Incorrect Answer
    B Only 2 Correct Answer Incorrect Answer
    C Both are correct Correct Answer Incorrect Answer
    D None of the above Correct Answer Incorrect Answer

    Solution

    Both are correct statements.

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