Demand-pull inflation is caused by
A) positive demand shocks.
B) positive supply shocks.
C) negative demand shocks.
D) negative supply shocks.
E) Alberta.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when there is an increase in aggregate demand, causing firms to raise prices in response to the increased demand for their goods and services. Positive demand shocks, such as increased consumer confidence or government spending, can lead to demand-pull inflation.

Demand-Pull Inflation Is Caused by