Demand-pull inflation occurs when
A) the government increases its expenditures.
B) aggregate demand increases persistently.
C) oil prices increase substantially.
D) aggregate supply and aggregate demand decrease persistently.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when there is a persistent increase in aggregate demand in the economy. This can be caused by factors such as increased consumer spending, increased government spending, or a surge in investment.

Demand-Pull Inflation Occurs When