A rise in general level of prices may be caused by<br/>1. An increase in the money supply<br/>2. A decrease in the aggregate level of output<br/>3. An increase in the effective demand<br/><br/>Select the correct answer using the codes given below:

1. An increase in the money supply — Correct. More money in circulation raises purchasing power; if output does not rise proportionately, it creates inflationary pressure.

2. A decrease in the aggregate level of output — Correct. Lower output means fewer goods and services available; with demand unchanged, prices tend to rise.

3. An increase in the effective demand — Correct. Higher effective demand pushes up aggregate demand; if supply is relatively inelastic, the general price level rises.

Therefore, all three can cause a rise in the general level of prices.