India Exam Junction
17. When too much money is chasing too few goods, the situation is :
deflation
inflation
recession
stagflation
Correct Answer :
inflation
Solution
Inflation is an economic situation where there is a general increase in prices and a decrease in the purchasing power of money. The specific scenario described—"too much money chasing too few goods"—refers to demand-pull inflation, where the demand for goods and services exceeds the available supply. This leads to a rise in prices as consumers compete to purchase limited goods.