Demand-pull inflation is caused by
A) aggregate demand increasing along a horizontal aggregate supply curve.
B) aggregate demand decreasing along a horizontal aggregate supply curve.
C) aggregate demand decreasing along an upward sloping or a vertical aggregate supply curve.
D) aggregate demand increasing along an upward sloping or a vertical aggregate supply curve.

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by an increase in aggregate demand along an upward sloping or a vertical aggregate supply curve. This increase in demand leads to an increase in prices due to the limited availability of goods and services, as the suppliers struggle to keep up with the demand. Therefore, option D is the correct answer.

Demand-Pull Inflation Is Caused by