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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.
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B

Increasing money supply
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C

Black money
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D

Increase in toll tax.
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Solution

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.

Economy

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