Assertion A During inflation there is increase in money supply and rise in price level Reason R...........

General Knowledge (CLAT) Indian Economy

Assertion (A): During inflation, there is increase in money supply and rise in price level.

Reason (R): The rise in prices is due to shortage in supply of essential consumer goods.

Both A and R are individually true and R is the correct explanation of A.

Both A and R are individually true but R is not the correct explanation of A

A is true but R is false

A is false but R is true

Price is set by market forces of demand and supply.
Both are independent reasons for price rise.
Hence, option 2 is the correct answer.

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