Demand-pull inflation persists because of
A)continuing increases in government expenditures.
B)continuing increases in the quantity of money.
C)continuing increases in the real wage rate.
D)continuing decreases in the money wage rate.
E)continuing increases in aggregate supply.

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by a sustained increase in the quantity of money in circulation, which leads to excess demand for goods and services. This increase in demand pushes up prices, and if the money supply continues to grow, the inflationary pressure will persist. None of the other choices directly relate to demand-pull inflation.

Demand-Pull Inflation Persists Because of