Demand-pull inﬂation is illustrated in the short run aggregate supply-aggregate demand model as a shift of aggregate
A) supply to the right.
B) supply to the left.
C) demand to the right.
D) demand to the left.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when the aggregate demand for goods and services in an economy exceeds the economy's ability to produce those goods and services at the current prices. This leads to an increase in prices and a shift of the aggregate demand curve to the right. Therefore, the correct choice is C, demand to the right.

Demand-Pull Inﬂation Is Illustrated in the Short Run Aggregate Supply-Aggregate