Q. “Inflation takes place when the supply falls drastically and the demand remains at the same level” – is related to which of the following?

[A] Core Inflation

[B] Bottleneck Inflation

[C] Cost – push Inflation

[D] Galloping Inflation

Answer: B
Notes:

Explanation: Bottleneck Inflation takes place when the supply falls drastically and the demand remains at the same level. Such situations arise due to supply-side accidents, hazards or mismanagement which is also known as ‘structural inflation’. This could be put in the ‘demand-pull inflation’ category.

Source: TMH Ramesh Singh

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