Suppose the aggregate demand curve shifts rightward, causing inflation.What type of inflation is this?
A) demand deficient inflation
B) cost-push inflation
C) demand-pull inflation
D) WAGE price spiral inflation

Question

Suppose the aggregate demand curve shifts rightward, causing inflation.What type of inflation is this?  
A) demand deficient inflation 
B) cost-push inflation 
C) demand-pull inflation 
D) WAGE price spiral inflation

Quizplus · Accepted Answer

When the aggregate demand curve shifts rightward, causing inflation, it is known as demand-pull inflation. This type of inflation occurs when there is excess demand for goods and services in the economy, leading to an increase in price levels. As demand increases, firms raise their prices to increase their profitability, leading to inflation.

Suppose the Aggregate Demand Curve Shifts Rightward, Causing Inflation