Demand-pull inflation results from
A)workers' pressure for higher wages.
B)policymakers' attempts to increase aggregate demand for current output above the full-employment level.
C)attempts by financial markets to deal with bracket creep.
D)attempts by the public to receive higher after-tax returns on their savings.

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by an increase in aggregate demand for goods and services that exceeds the economy's ability to produce them. Policymakers may try to increase aggregate demand through expansionary monetary or fiscal policy, such as increasing government spending or lowering interest rates, which can lead to demand-pull inflation. Workers' pressure for higher wages could contribute to inflation, but it is not the primary cause. The other choices are not related to demand-pull inflation.

Demand-Pull Inflation Results from