Demand-pull inflation is associated with a(n):
A) decrease in the aggregate supply curve.
B) increase in the aggregate supply curve.
C) increase in the aggregate demand curve.
D) decrease in the aggregate demand curve.
E) decline in the availability of a productive resource

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when aggregate demand increases faster than the economy's aggregate supply can increase. This results in higher prices due to the increased demand for goods and services. Therefore, an increase in aggregate demand curve best describes demand-pull inflation.

Demand-Pull Inflation Is Associated with A(n)