Suppose buyers expect prices to rise dramatically in the near future.If they decide to purchase items today before the price rise,the possible result can be:

Question

Quizplus · Accepted Answer

When buyers expect prices to rise dramatically in the near future and decide to purchase items today before the price rise, it results in an increase in demand which leads to demand-pull inflation. This is because the increase in demand for goods and services leads to a shortage of supply and sellers can increase prices as there is a willingness to pay more from buyers. Therefore, the best choice is B.

Suppose Buyers Expect Prices to Rise Dramatically in the near Future.If