Which of the following is a correct statement?
A)It is relatively easy to distinguish between cost-push and demand-pull inflation even if you don't know the source of the inflation.
B)A supply shock will cause a variation of demand-pull inflation that can lead to hyperinflation.
C)Demand-pull inflation will continue so long as there is excess total spending in the economy.
D)Demand-pull inflation is usually accompanied by higher unemployment rates.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand in an economy outpaces aggregate supply, leading to higher prices. It continues as long as there is excess total spending.

Which of the Following Is a Correct Statement