The rise in prices of goods and services in an economy may be caused due to:
Increase in money supply
Increase in government expenditure
RBI purchasing government securities from the public
Increase in wages
Select the correct answer using the code given below:
Options:
A . (i), (ii) & (iii) only
B . (i), (ii), & (iv) only
C . (i) & (ii) only
D . All of the above
Answer: Option D Answer: (d) One of the reasons of rising in the prices of goods and services is due to increase in the money supply. An increase in money supply can be caused to the government increasing the expenditure or the government increasing the salaries. When RBI purchases government security from the public it pays money to the public and ultimately increases the money supply. So, all the statements are true.
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