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Demand-pull inflation can be as a result of___________

Economics
WAEC 2021

Demand-pull inflation can be as a result of___________

  • A. increase in the cost of production.
  • B. excessive supply of foodstuff
  • C. deficit financing by the government.
  • D. increase in import duties.
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Correct Answer: Option C
Explanation

Demand-pull inflation is when there is an increase in aggregate demand, and the supply remains the same or decreases. 

Demand-pull inflation can be caused by an expanding economy, increased government spending, or overseas growth.

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