Economics · Macroeconomics (Inflation)
Demand-pull inflation arises when:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The government reduces money supply
- 2Structural bottlenecks reduce the supply of essential goods
- 3Aggregate demand exceeds aggregate supply at full employment level✓
- 4Cost of production increases due to a rise in input prices
Correct answer
Aggregate demand exceeds aggregate supply at full employment level
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