Demand- pull inflation can start when
A)input costs rise.
B)aggregate supply decreases.
C)aggregate demand increases.
D)unemployment is above the natural rate.
E)people incorrectly forecast inflation.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand increases, leading to an increase in prices due to a shortage of goods and services. This is typically caused by an increase in consumer and business confidence, a decrease in taxes, or an increase in government spending. Input costs rising, aggregate supply decreasing, unemployment being above the natural rate, and incorrect inflation forecasts may all contribute to inflation, but they do not necessarily start demand-pull inflation.

Demand- Pull Inflation Can Start When