Demand-pull inﬂation in the short run raises the price level and
A) real wages.
B) real output.
C) the unemployment rate.
D) nominal wages.

Question

Quizplus · Accepted Answer

Demand-pull inflation in the short run typically raises the price level and increases real output as firms produce more to meet the higher demand. This does not necessarily increase real wages or the unemployment rate directly in the short run, and the effect on nominal wages can vary.

Demand-Pull Inﬂation in the Short Run Raises the Price Level