Demand-pull inflation occurs:
A) at or close to full employment.
B) because of excess total spending.
C) when "too much money is chasing too few goods."
D) all of the above.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when the total spending in an economy exceeds the economy's ability to supply goods and services, resulting in an increase in prices. This typically happens when the economy is operating at or close to full employment, with all resources being utilized. The common phrase used to describe this type of inflation is "too much money chasing too few goods." Therefore, all of the above choices are correct.

Demand-Pull Inflation Occurs