Other things equal, demand-pull inflation results in output ________ and the price level ________.
A) increasing; increasing
B) increasing; decreasing
C) decreasing; increasing
D) decreasing; decreasing

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand exceeds aggregate supply at full employment level, which drives up prices and increases output. Hence, output increases and the price level increases as well.

Other Things Equal, Demand-Pull Inflation Results in Output ________ and the Price