Which of the following could begin an episode of demand-pull inflation?
A)a decrease in consumer optimism
B)expectations of higher rates of return in investment
C)an increase in the capital stock
D)a slower rate of economic growth by a major trading partner country

Question

Quizplus · Accepted Answer

When investors expect higher rates of return on their investments, they are more willing to put their money into the market. This increase in investment can lead to an increase in aggregate demand, which can cause demand-pull inflation.

Which of the Following Could Begin an Episode of Demand-Pull