If the economy is producing at capacity and consumers are willing and able to buy more,this may cause
A)Demand-pull inflation.
B)Cost-push inflation.
C)Supply-side inflation.
D)The price effect.

Question

Quizplus · Accepted Answer

When the economy is producing at capacity and consumers are willing to buy more, this creates excess demand which pushes prices up, resulting in demand-pull inflation.

If the Economy Is Producing at Capacity and Consumers Are