Increases in the quantity of money can start a _{--------------------}inflation and an increase in government expenditure can start a_{--------------------} inflation. A)cost-push; demand-pull B)demand-pull; demand-pull C)demand-pull; cost-push D)cost-push; cost-push E)None of the above is correct because increases in the quantity of money are necessary to continue an inflation but cannot start an inflation.

Question

Quizplus · Accepted Answer

Increases in the quantity of money typically lead to demand-pull inflation, as more money in the economy increases demand for goods and services. Similarly, an increase in government expenditure also boosts demand, leading to demand-pull inflation.

Increases in the Quantity of Money Can Start a --------------------inflation

Increases in the Quantity of Money Can Start a _{--------------------}inflation