Use the figure below to answer the following question.

Figure 28.1.5
-The economy starts out at a full-employment equilibrium.Some events then occur that generate a demand-pull inflation.
All of the following events except an increase in ________ might cause a demand-pull inflation.

Question

Use the figure below to answer the following question.
  
Figure 28.1.5
-The economy starts out at a full-employment equilibrium.Some events then occur that generate a demand-pull inflation.
All of the following events except an increase in ________ might cause a demand-pull inflation.

Quizplus · Accepted Answer

An increase in the money wage rate would not cause demand-pull inflation; instead, it might lead to cost-push inflation by increasing production costs. Demand-pull inflation is typically caused by an increase in aggregate demand, which can result from increases in exports, the quantity of money, government expenditure, or transfer payments.

Use the Figure Below to Answer the Following Question