Which of the following factors is most correct?
A) Demand-pull inflation traditionally exists during periods of economic expansion when the demand for goods and services exceeds the available supply of such goods and services.
B) Cost-push inflation occurs when prices are raised to cover rising production costs, such as wages
C) Speculative inflation is caused by the expectation that prices will continue to rise, resulting in increased buying to avoid even higher future prices
D) All of the above are correct

Question

Quizplus · Accepted Answer

All of the factors mentioned in A, B, and C can contribute to inflation under different circumstances. Demand-pull inflation is typically seen during periods of economic expansion when there is increased demand for goods and services. Cost-push inflation occurs when there is a rise in production costs, such as wages, which causes firms to increase prices to maintain profitability. Finally, speculative inflation can occur when people expect prices to continue rising, leading them to purchase goods and services before prices go even higher.

Which of the Following Factors Is Most Correct