1.

It has been generally viewed that when an economy grows beyond its potential growth rate, it causes inflation. How does growing faster than the potential rate cause inflation?

A. Fast growth causes more productivity which leads to higher supply and cost put inflation
B. Fast growth causes quick resources utilization to fulfill the higher demand
C. Fast growth cause more employment opportunities which leads to rise in prices.
D. None of these.
Answer» C. Fast growth cause more employment opportunities which leads to rise in prices.


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