Which of the following is a possible cause of demand pull inﬂation?
A) An increase in the prices of imported raw materials.
B) A higher decline in wages than in the rate of inﬂation.
C) A decrease in the income tax rates in the economy.
D) An increase in the interest rates in the economy.

Question

Quizplus · Accepted Answer

A decrease in the income tax rates in the economy can lead to demand-pull inflation by increasing consumers' disposable income, thereby increasing demand for goods and services.

Which of the Following Is a Possible Cause of Demand