Which of the following factors is most correct?
A)Demand-pull inflation traditionally exists during periods of economic expansion when the demand for goods and services exceeds the available supply of such goods and services.
B)Cost-push inflation occurs when prices are raised to cover rising production costs, such as wages
C)Speculative inflation is caused by the expectation that prices will continue to rise, resulting in increased buying to avoid even higher future prices
D)All of the above are correct
E)none of the above are correct

Question

Quizplus · Accepted Answer

All of the given factors can contribute to inflation in different circumstances. Demand-pull inflation occurs when there is high demand for goods and services, but supply cannot keep up with it, leading to higher prices. Cost-push inflation happens when the production costs, such as wages or raw materials, increase, leading to higher prices to maintain profitability. Speculative inflation happens when people expect prices to rise in the future, and buy more goods and services now, leading to higher demand and higher prices. Therefore, all three factors can contribute to inflation in different ways, and D is the correct choice.

Which of the Following Factors Is Most Correct