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e-lub [12.9K]
4 years ago
9

Demand-pull inflation occurs when

English
2 answers:
musickatia [10]4 years ago
6 0

The fourth alternative is correct (D).

<u>Demand inflation occurs when demand for goods and services exceeds supply. </u>

Let us assume an economy that has a rigid productive structure, that is, it can not increase production in the short term, only in the long run. I<u>f the economy goes through a monetary shock, </u><u>as happens if the government prints and injects money into the economy</u><u>, the excess money in the hands of consumers will increase the demand for the goods.</u> However, as the productive structure does not support the increase in production, demand will be greater than supply and this will cause demand inflation.

yanalaym [24]4 years ago
6 0

Answer:

d

Explanation:

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