With reference to the lsquo bottleneck inflation rsquo which of the following statements is correct ...........

Economic and Social Issues Inflation Trends

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With reference to the ‘bottleneck inflation’ which of the following statements is correct?

Bottleneck inflation takes place when the supply falls drastically and the demand remains at the same level.

Bottleneck inflation takes place when the supply falls drastically along with the demand.

Bottleneck inflation takes place when the supply increases rapidly and the demand remains at the same level.

Bottleneck inflation takes place when the supply increases rapidly along with the deman

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Explanation:

A bottleneck is a point of congestion in a production system (such as an assembly line or a computer network) that occurs when workloads arrive too quickly for the production process to handle. The inefficiencies brought about by the bottleneck often creates delays and higher production costs. The term "bottleneck" refers to the typical shape of a bottle and the fact that the bottle's neck is the narrowest point, which is the most likely place for congestion to occur, slowing down the flow of liquid from the bottle.

A bottleneck can have a significant impact on the flow of manufacturing and can sharply increase the time and expense of production. Companies are more at risk for bottlenecks when they start the production process for a new product. This is because there may be flaws in the process that the company must identify and correct; this situation requires more scrutiny and fine-tuning.