Demand-pull inflation is caused by:
A) an increase in aggregate demand.
B) an increase in short-run aggregate supply.
C) a decrease in aggregate demand.
D) a decrease in short-run aggregate supply.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand in an economy outpaces aggregate supply, leading to higher prices. This can be caused by various factors such as increased consumer spending, government expenditure, or investment, but it fundamentally stems from an increase in aggregate demand.

Demand-Pull Inflation Is Caused By