Inflation may occur if there is
...Inflation may occur if there is
Excess supply over demand
Increase in productivity
Excessive demand with limited supply
Increased government spending in a depressed economy
Correct answer is C
Excessive demand with limited supply; it causes rise in prices and increases in equalities: Generally, excess demand results in inflation (continuous rise in prices) without increase in output and employment. People will be will to pay high prices for few goods. which is generally what in flation is about. a fall in the purchasing power of money as more money will be chasing few goods.
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