Demand-pull inﬂation is usually accompanied by low unemployment and higher real output.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand exceeds aggregate supply, which means there is more demand for goods and services than what can be produced. This may lead to firms increasing their production levels, which can result in higher real output and may also require hiring more workers, leading to low unemployment. Therefore, demand-pull inflation is usually accompanied by low unemployment and higher real output.

Demand-Pull Inﬂation Is Usually Accompanied by Low Unemployment and Higher