In a demand-pull inflation, if the Fed stops expanding the quantity of money,
A) the demand-pull inflation ends.
B) a cost-push inflation will occur.
C) a deflation will occur.
D) government expenditure will cause the demand-pull inflation to continue.

Question

Quizplus · Accepted Answer

If the Fed stops expanding the quantity of money, the additional demand that was causing the demand-pull inflation will cease, leading to the end of the inflationary pressure.

In a Demand-Pull Inflation, If the Fed Stops Expanding the Quantity