_____ occurs when aggregate demand expands so much that equilibrium output exceeds full employment output.
A) Demand-pull inflation
B) Demand-push inflation
C) Cost-push inflation
D) Cost-pull inflation

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand in an economy outpaces aggregate supply, leading to an increase in the price level and causing equilibrium output to exceed full employment output.

_____ Occurs When Aggregate Demand Expands So Much That Equilibrium