It has been generally viewed that when an economy grows beyond its potential growth rate, it causes inflation. How does growing faster than the potential rate cause inflation?
[A] Fast growth causes quick resource utilization to fulfill the higher demand
[B] Fast growth causes more employment opportunities which leads to rise in prices
[C] Fast growth causes more productivity which leads to higher supply and cost push inflation
[D] All of above mentioned reasons

Show Answer


Kindly help us to keep GKToday updated and error free. Use this form to report error or outdated information in questions. We shall rectify asap...