Demand- pull inflation starts with
A) an increase in aggregate demand.
B) a decrease in aggregate supply.
C) a decrease in aggregate demand.
D) an increase in aggregate supply.

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by an increase in aggregate demand which results in an increase in prices. As demand for goods and services exceeds the supply, producers increase their prices in order to respond to the growing demand. This kind of inflation usually occurs when the economy is booming and employment is high, and consumers have more disposable income to spend.

Demand- Pull Inflation Starts with