Increases in the quantity of money can start a ____________inflation and an increase in government expenditure can start a ____________inflation.
A) cost-push; cost-push
B) demand-pull; demand-pull
C) demand-pull; cost-push
D) cost-push; demand-pull

Question

Quizplus · Accepted Answer

Increases in the quantity of money typically lead to demand-pull inflation, as more money in the economy increases demand for goods and services. Similarly, an increase in government expenditure also raises overall demand, leading to demand-pull inflation.

Increases in the Quantity of Money Can Start a ____________Inflation