Which of the following economic changes are consistent with demand-pull inflation? Check all that apply. Falling unemployment Excessive issuance of money by the central bank An increase in the price level
Which of the following economic changes are consistent with demand-pull inflation? Check all that apply. Falling unemployment Excessive issuance of money by the central bank An increase in the price level
Chapter22: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 13P
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Question
Which of the following economic changes are consistent with demand -pull inflation? Check all that apply.
Falling unemployment
Excessive issuance of money by the central bank
An increase in the price level
Expert Solution
Step 1
Demand-pull inflation occurs when there is an increase in aggregate demand for goods and services but there is no change in the aggregate supply of goods and services. This situation leads to an increase in the price level.
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