A demand-pull inflation requires persistent increases in
A) tax rates.
B) government expenditures.
C) the quantity of money.
D) real wages.

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by an increase in the overall demand for goods and services in an economy. The most common cause of this is an increase in the quantity of money in circulation. When there is more money available to consumers, they are able to buy more goods and services, driving up prices. Taxes, government expenditures, and real wages are not necessarily linked to demand-pull inflation.

A Demand-Pull Inflation Requires Persistent Increases in