Sustained increases in the overall price level due to high levels of aggregate demand are called which of the following?
A)booming aggregate demand
B)demand-pull inflation
C)cost-push inflation
D)stagflation

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when there is excess demand in the economy, leading to upward pressure on prices. This can happen, for example, if consumer confidence is high and people are spending more, or if there is a surge in government spending. Booming aggregate demand is not a commonly used term, and cost-push inflation occurs when prices rise due to an increase in production costs, such as higher wages or raw material prices. Stagflation occurs when there is both high inflation and high unemployment, which is not specifically related to aggregate demand.

Sustained Increases in the Overall Price Level Due to High