A demand- pull inflation is initially characterised by
A)increasing real output and a labour surplus.
B)increasing real output and a labour shortage.
C)decreasing real output and a labour shortage.
D)decreasing real output and a labour surplus.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand in an economy outpaces aggregate supply, leading to increased real output and a shortage of labor as businesses hire more workers to meet the higher demand.

A Demand- Pull Inflation Is Initially Characterised by