Demand-pull inflation starts with
A)an increase in aggregate demand.
B)a decrease in aggregate demand.
C)an increase in potential GDP.
D)an increase in aggregate supply.
E)a decrease in aggregate supply.

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by an increase in aggregate demand, meaning that there is a higher demand for goods and services than what the economy can supply without pushing up prices. This leads to an increase in the price level and ultimately inflation.

Demand-Pull Inflation Starts with