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

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by an increase in aggregate demand. This means that when the demand for goods and services in an economy increases, the market price of these goods and services will go up, resulting in inflation. As demand continues to exceed supply, producers will increase prices to maximize their profits.

Demand-Pull Inflation Is Caused By