UPSC Economics Business and Foreign Trade / व्यापार और विदेश व्यापार Question Bank Money Supply and Indian Financial System

      Consider the following statement:

1. Increase in private expenditure

2. Increase in exports

3. Increase in taxation

4. Rapid growth of population

Choose the factor that does not cause an increase in demand of goods and services.

A) 1 only

B)        2 only

C) 3 only

D)        4 only

Correct Answer: C

Solution :

Factors causing an increase in demand for goods & services:

(i) Increase in public expenditure

(ii) Increase in private expenditure

(iii) Increase in exports

(iv) Reduction in taxation

(v) Rapid growth of population

(vi) Black money

(vii) Deficit financing

(viii) Cheap money policy

(ix) Increase in consumer spending

(x) Department of Tax internal debts.