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    Question

    When too much money is chasing too few goods, the

    resulting inflation is ____________
    A Cost-push inflation Correct Answer Incorrect Answer
    B Demand-pull inflation Correct Answer Incorrect Answer
    C Stagflation Correct Answer Incorrect Answer
    D Disinflation Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Demand-Pull Inflation When demand for goods or services rises faster than the supply of those goods and services, the result is demand-pull inflation. Demand-pull inflation is when there is an increase in aggregate demand, and the supply remains the same or decreases. When supply cannot meet growing demand, prices for goods and services are pulled higher.

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