Inflation that starts because aggregate demand increases is called
A)cost-push inflation.
B)demand-pull inflation.
C)anticipated inflation.
D)unanticipated inflation.
E)political inflation.

Question

Quizplus · Accepted Answer

When inflation starts because aggregate demand increases, it is referred to as demand-pull inflation. This type of inflation occurs when there is excess demand for goods and services, causing prices to rise. As demand remains high, businesses may increase prices to maximize their profits. This can lead to a cycle of rising prices and increased inflation.

Inflation That Starts Because Aggregate Demand Increases Is Called