Which of the following factors are responsible for demand pull inflation 1 Increase in Per capita in...........

Indian Economy (Easy) Inflation

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Which of the following factors are responsible for demand pull inflation?

1. Increase in Per capita income

2. Deficit financing

3. Infrastructural deficiencies

Select the code from following

1&2 only

2&3 only

1&3 only

All of the above

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Explanation:

Demand pull inflation occurs when there is a money flow in the market. If people have higher disposable income their purchasing capacity will increase and a situation will arise of too much money chasing too few goods. This condition is called demand pull condition.
Deficit financing and increase in per capita income will increase the money supply in the market.
Infrastructural deficiencies will cause increase in the cost of production. This will cause cost push inflation.