Which of the following can create demand-pull inflation?
A) Excessive aggregate spending.
B) Sharply rising oil prices.
C) Higher labor costs.
D) Recessions and depressions.

Question

Quizplus · Accepted Answer

Excessive aggregate spending, also known as demand-pull inflation, occurs when the demand for goods and services exceeds the supply, leading to rising prices. This can happen when there is too much money circulating in the economy, leading to more spending and creating greater demand.

Which of the Following Can Create Demand-Pull Inflation