Consider the following statements regarding the price rise:
(a) Hoarding of essential commodities
(b) Fall in production
(c) Lack of proper storage facility leading to wastage
(d) Excess of demand over supply
Which of the above is/are correct?
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Only (a)
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Only (b) and (c)
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Only (a), (b) and (d)
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All of these
D
Correct answer
Explanation
Statement 1 is correct because by hoarding essential commodities or by creating man made shortage leads to lesser availability, which ultimately leads to demand-pull inflation.
Statement 2 is correct. Fall in production decrease in supply over demand.
Statement 3 is correct. Lack of proper storage facility leads to decrease in availability of the goods.
Statement 4 is correct. Increase in demand over supply also leads to demand-pull inflation.