Demand-pull inflation results from continually increasing the quantity of money,which leads to continually
A)decreasing potential GDP.
B)increasing potential GDP.
C)increasing aggregate supply.
D)decreasing aggregate demand.
E)increasing aggregate demand.

Question

Quizplus · Accepted Answer

Demand-pull inflation is caused by an increase in aggregate demand, which can come from increasing the quantity of money in circulation. This leads to an increase in demand for goods and services, causing an increase in prices. Therefore, the correct option is increasing aggregate demand.

Demand-Pull Inflation Results from Continually Increasing the Quantity of Money,which