Correct Answer: Demand-Pull Inflation
Subject: economics
Explanation: • <b>Key Fact</b> Demand-Pull Inflation occurs when demand pushes prices up because it exceeds supply. • <b>Supporting Detail</b> Example: Increased spending during festivals increases demand, raising prices. • <b>Related Concept</b> Lower interest rates boosting consumer spending can cause this. • <b>Why wrong options are wrong</b> Cost-push is due to rising production costs. Structural is due to systemic weaknesses. • <b>Exam Trick</b> "Demand > Supply" = Demand-Pull. "Cost of raw materials rises" = Cost-Push. • <b>Additional Info</b> Depreciation of Rupee can also cause demand-pull by making exports cheaper and increasing foreign demand.
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