[Solved] When too much money is chasing too few goods, the situation is -

McqMate

Q.	When too much money is chasing too few goods, the situation is -
A.	deflation
B.	inflation
C.	recession
D.	stagflation
Answer» B. inflation
Explanation: Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve. This is commonly described as "too much money chasing too few goods". More accurately, it should be described as involving "too much money spent chasing too few goods", since only money that is spent on goods and services can cause inflation.

4.3k

0

Do you find this helpful?

40

View all MCQs in

Discussion

No comments yet

Related MCQs

When too much money is chasing too few goods, the situation is -
A trade of goods and services in the exchange for other goods or services rather than for money is known as:
Regarding money supply situation in India it can be said that the :
A situation of large number of firms producing similar goods is termed as :
"Bad money will drive out good money from circulation." This is known as :
If he Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should -
The accumulation of idle money balances or inactive money is called:
"he national income consists of a collection of goods and services reduced to common basis by being measured in terms of money,"— Who says this?
Aneconomy in which there are no flows of labour, goods or money to and from other nations is a/an -
A piece of paper entitling the owner to money payments, cutprice or free goods or rations is called