________ occurs when increases in aggregate demand are not matched by increases in aggregate supply.
A)Demand-pull inflation
B)Cost-push inflation
C)Unemployment
D)Deflation

Question

Quizplus · Accepted Answer

Demand-pull inflation happens when the demand for goods and services rises faster than their supply. As a result, the prices of these goods and services increase due to the high demand, and inflation occurs. This type of inflation occurs when the economy is operating at full employment or close to it, and there is little slack in the supply of goods and services. Therefore, the best choice is A) Demand-pull inflation.

________ Occurs When Increases in Aggregate Demand Are Not Matched