{"id":30221,"date":"2024-02-27T10:12:18","date_gmt":"2024-02-27T10:12:18","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=30221"},"modified":"2024-02-27T10:12:20","modified_gmt":"2024-02-27T10:12:20","slug":"upsc-prelims-2021-question-72","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-prelims-2021-question-72\/","title":{"rendered":"UPSC Prelims 2021 &#8211; Question 72"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-prelims-test-series?utm_source=Blog&amp;utm_medium=Blog&amp;utm_campaign=Blog-%20PTS\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/02\/Prelims-Test-Series-eng-and-hindi-1280\u00d7330.svg\" alt=\"UPSC Prelims Mock Test - ECONOMY 2\" class=\"wp-image-24924\" width=\"779\" height=\"199\"\/><\/a><\/figure>\n\n\n\n<p>Here is Question No. 72 a part of our series on UPSC Prelims 2021.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-6a50c03f96df8\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a50c03f96df8\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-prelims-2021-question-72\/#Q72_With_reference_to_the_Indian_economy_demand-pull_inflation_can_be_causedincreased_by_which_of_the_following\" >Q72. With reference to the Indian economy, demand-pull inflation can be caused\/increased by which of the following?<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q72_With_reference_to_the_Indian_economy_demand-pull_inflation_can_be_causedincreased_by_which_of_the_following\"><\/span>Q72. With reference to the Indian economy, demand-pull inflation can be caused\/increased by which of the following?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol class=\"wp-block-list\"><li>Expansionary policies<\/li><li>Fiscal stimulus<\/li><li>Inflation-indexing wages<\/li><li>Higher purchasing power<\/li><li>Rising interest rates<\/li><\/ol>\n\n\n\n<p>Select the correct answer using the code given below.<br>a) 1, 2 and 4 only<br>b) 3, 4 and 5 only<br>c) 1, 2, 3 and 5 only<br>d) 1, 2, 3, 4 and 5<\/p>\n\n\n\n<p>Answer: (a) Exp:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Demand-Pull Inflation- This type of inflation is caused by an increase in demand and when the demand in the economy outgrows the supply in the economy. This kind of inflation can be described as \u201ctoo much money chasing too few goods\u201d.<\/li><li>Expansionary policies: When the government spends more freely, money in the market is increased. It leads to increased demand for goods and fuels demand-pull inflation.<\/li><li>Fiscal Stimulus: It also increases the money in the market leading to increased demand for the goods and fuels demand-pull inflation<\/li><li>Higher Purchasing Power: When consumers earn a higher income, they feel confident and spend more. This leads to more demand and fuels Demand-pull inflation Inflation-indexing wages and rising interest rates do not increase or cause demand-pull inflation<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688 lazyload\" width=\"781\" height=\"182\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 781px; --smush-placeholder-aspect-ratio: 781\/182;\" \/><\/a><\/figure>\n\n\n\n<p>For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p>For Daily Updates and Study Material:<\/p>\n\n\n\n<p>Join our Telegram Channel \u2013&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>1. 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With reference to the Indian economy, demand-pull inflation can be caused\/increased by which of the following?<\/p>\n<p>Expansionary policies<\/p>\n<p>Fiscal stimulus<\/p>\n","protected":false},"author":17,"featured_media":30225,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[1644],"tags":[232,515,231],"class_list":["post-30221","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-upsc-prelims","tag-upsc","tag-upsc-cse","tag-upsc-prelims"],"aioseo_notices":[],"aioseo_head":"\n\t\t<!-- All in One SEO 4.9.9 - aioseo.com -->\n\t<meta name=\"description\" content=\"Q72. 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