Demand- pull inflation results from continually increasing the quantity of money, which leads to a continually
A) decreasing long- run aggregate supply.
B) increasing aggregate demand.
C) decreasing aggregate demand.
D) increasing aggregate supply.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when there is excessive demand in the economy compared to the available supply of goods and services. This is often caused by an increase in the quantity of money, which leads to an increase in aggregate demand. Therefore, the correct answer is B - increasing aggregate demand.

Demand- Pull Inflation Results from Continually Increasing the Quantity of Money