Which of the following factors could start a demand-pull inflation?
A) A decrease in the money wage rate
B) An increase in the money wage rate
C) A decrease in government expenditure
D) An increase in the quantity of money
E) An increase in tax rates

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by an increase in demand for goods and services, which can be triggered by an increase in the quantity of money in the economy. This increase in money supply can lead to more spending, thereby pulling prices up as demand outstrips supply.

Which of the Following Factors Could Start a Demand-Pull Inflation