Suppose buyers expect prices to rise dramatically in the near future. If they decide to purchase items today before the price rise, the possible result can be:

Question

Quizplus · Accepted Answer

When buyers expect prices to rise and thus increase their demand for goods, it leads to an increase in demand for goods and services. The increase in demand leads to an increase in prices, which is demand-pull inflation. Therefore, the result of buyers purchasing items before the price rise would be demand-pull inflation.

Suppose Buyers Expect Prices to Rise Dramatically in the near Future