Question

The spiral usually begins with an increase in demand. What is the direct effect of this increase? Producers raise prices to continue to make a profit. The government prints more money, lowering the value of money. Workers negotiate with employers to receive more money. Consumers need higher wages to keep up with rising prices.

Answer 1

Answer:

The correct answer is letter "A": Producers raise prices to continue to make a profit.

Explanation:

The inflationary spiral refers to the rapid increase in the price level as a result of demand-pull inflation which at the same time causes to have higher wages in the market. The last promotes manufacturers to raise the prices more to make more revenues sending the inflation level to the sky.

Answer 2

Answer:I believe it is A,

Explanation:

because when demand increases so does price. That is called demand-pull inflation. This also means economic conditions are strong.