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      Question

      Which of the following types of inflation occurs when

      there is an increase in the general price level due to excessive demand?
      A Cost-push inflation Correct Answer Incorrect Answer
      B Stagflation Correct Answer Incorrect Answer
      C Demand-pull inflation Correct Answer Incorrect Answer
      D Hyperinflation Correct Answer Incorrect Answer
      E Disinflation Correct Answer Incorrect Answer

      Solution

      Demand-pull inflation occurs when there is excessive aggregate demand in the economy, leading to upward pressure on prices. It typically happens when there is robust economic growth, high consumer spending, and low unemployment, causing demand to outpace the economy's productive capacity.

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