Q. The “inflation takes place when the supply falls drastically and the demand remains at the same level”?
Answer: D
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: Ramesh Singh

