When does demand pull in?ation occur in an economy?
A) When a rise in aggregate demand leads to an increase in overall prices.
B) When a fall in aggregate demand leads to an increase in overall prices.
C) When a rise in aggregate supply leads to a reduction in overall prices.
D) When a fall in aggregate supply leads to an increase in overall prices.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when an increase in aggregate demand in an economy outpaces aggregate supply, leading to an increase in the overall price level.

When Does Demand Pull In?ation Occur in an Economy