Question

Which situation would be MOST likely to result in demand-pull inflation?

Answer 1

Answer:

A) Minimum wage increases

Explanation:

An increase in the costs of raw materials or labor can contribute to cost-pull inflation. Demand-pull inflation can be caused by an expanding economy, increased government spending, or overseas growth.

military spending raises prices for military equipment. When the government lowers taxes, it also drives demand. Consumers have more discretionary income to spend on goods and services. When that increases faster than supply, it creates inflation.

Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product