Demand-pull inflation is an inflation that results from an initial .
A) increase in natural resource prices
B) increase in aggregate demand
C) decrease in aggregate demand
D) increase in wage rates

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand exceeds the available supply of goods and services, leading to an increase in prices. Therefore, an increase in aggregate demand is the initial cause of demand-pull inflation. The other options may contribute to inflation in different ways, but they are not the primary cause of demand-pull inflation.

Demand-Pull Inflation Is an Inflation That Results from an Initial