Question

Q. With reference to the demand-pull inflation, which of the following is not the factor responsible for demand-pull inflation?

• A.
  Increasing foreign exchange reserve.
• B.
  Increasing money supply
• C.
  Black money
• D.
  Increase in toll tax.

Answer 1

The correct option is D

Increase in toll tax.
Explanation:

Option (a), (b) and (c) i.e. increasing foreign exchange reserves, increase in money supply and black money are responsible for demand-pull inflation.

Option (d) i.e. increase in toll tax is the correct answer as it leads to the increased cost of transportation and thus it amounts to cost-push inflation.