Demand-pull inflation may be defined as an excessive demand for goods and services during periods of economic expansion as a result of large increases in the money supply.

Question

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Demand-pull inflation occurs when there is an increase in the demand for goods and services, which exceeds the available supply, leading to an increase in prices. This can be caused by an increase in the money supply, causing people to have more disposable income and increasing their willingness to spend.

Demand-Pull Inflation May Be Defined as an Excessive Demand for Goods