Demand pull inflation result from ?
Correct answer: B. consumer business and government demand for goods and services in excess of an economy's capacity to produce
- A. demand for government spending on public goods goes due to lack of financial backup through tax collection
- B. consumer business and government demand for goods and services in excess of an economy's capacity to produce
- C. a shortage of demand for goods and services in excess of supply during depression
- D. demand for public goods is greater than demand for consumer goods
Explanation
Demand-pull inflation occurs when total consumer, business, and government demand exceeds the economy's capacity to produce goods and services. This excess demand pushes prices upward.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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