Demand-pull inflation starts as the
A) AD curve shifts rightward.
B) LAS curve shifts leftward.
C) AD curve shifts leftward.
D) LAS curve shifts rightward.

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by increasing aggregate demand, which shifts the AD curve rightward. As demand increases, prices rise, stimulating an increase in production, leading to a rise in wages, and ultimately resulting in a sustained increase in prices.

Demand-Pull Inflation Starts as the