Question

Which out of the following is phenomenon that leads to
Demand-Pull Inflation?

Select one:
a.
It is a situation of persistent rise in inflation along with dip in growth and increase in unemployment
b.
It is a situation when aggregate demand in an economy
outpaces aggregate supply
c.
It is a situation caused by an increase in prices of inputs
like labour, raw material etc
d.
It is a situation when a nation experiences very high and
accelerating inflation.

= It is a situation when aggregate demand in an economy
outpaces aggregate supply​

Answer 1

Answer: It is a situation when aggregate demand in an economy

outpaces aggregate supply​.

Explanation:

Demand pull inflation occurs when the total demand of goods and services for a particular economy is more than the total supply.

This will lead to a rise in the prices of the goods as the sellers will increase prices due to the higher demand. When this occurs, a demand pull inflation has happened.

Answer 2

It is indeed a condition wherein the aggregate demand through an economy exceeds market equilibrium.

• Whenever the overall prices for consumer spending together in a given or specific economy exceed the existing inventory, thus the demands pull inflation arises.
• As a consequence of the increased demands, vendors would raise their pricing, resulting in some kind of a spike in the cost of the items. Whenever this happens, such demand-pull inflation must have occurred.

Thus the above response i.e., "option b" is correct.

Learn more:

https://brainly.com/question/20706784