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

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when there is an increase in aggregate demand. This can be caused by factors such as increased consumer spending, government spending, or business investment. The increase in demand leads to an increase in prices as producers respond to the higher demand by charging more for their goods and services.

Demand-Pull Inflation Starts with