Economics · Inflation
Which of the following situations is a primary cause of Demand-Pull Inflation?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1An increase in government direct tax rates reducing disposable income
- 2A fall in the cost of raw materials and production inputs
- 3An increase in money supply leading to an expansion of aggregate demand that outpaces aggregate supply✓
- 4An increase in aggregate supply keeping demand constant
Correct answer
An increase in money supply leading to an expansion of aggregate demand that outpaces aggregate supply
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