Demand-pull inflation results when consumers, businesses, and the government want to buy more than the full-employment level of output.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when the demand for goods and services exceeds the supply of goods and services produced at the full-employment level, leading to an increase in the general price level. This can happen when consumers, businesses, or the government increase their spending beyond the capacity of the economy to produce goods and services.

Demand-Pull Inflation Results When Consumers, Businesses, and the Government Want