Assertion :During inflation, there is increase in money supply and rise in price level. Reason: The rise in prices is due to shortage in supply of essential consumer goods.

Both Assertion and Reason are correct and Reason is the correct explanation for Assertion

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Both Assertion and Reason are correct but Reason is not the correct explanation for Assertion

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Assertion is correct but Reason is incorrect

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Assertion is incorrect but Reason is correct

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Solution

The correct option is A Both Assertion and Reason are correct and Reason is the correct explanation for Assertion
Inflation occurs due to impalance between supply and demand of money.The price level of goods and services rise, the value of currency reduces leading.

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