Final answer:
Fast growth in other countries (Option B) can cause demand-pull inflation by increasing aggregate demand, leading to 'too many dollars chasing too few goods'. The rise in supply (Option C) in the financial market typically leads to a decline in interest rates.
Step-by-step explanation:
The cause of demand-pull inflation is typically increased aggregate demand in an economy. Among the options provided, the one that is a cause of demand-pull inflation is fast growth in other countries (Option B). This growth could lead to increased demand for exports, which would in turn increase the aggregate demand within an economy. This increased demand can lead to higher prices as there are 'too many dollars chasing too few goods', a classic description of demand-pull inflation.
Regarding the changes in the financial market that will lead to a decline in interest rates, the correct answer is a rise in supply (Option C). If there is more money available to lend (a rise in supply of loanable funds), then the price of borrowing that money—which is the interest rate—tends to fall.
Demand-pull inflation is caused by an increase in aggregate demand, meaning an increase in the total spending by consumers, businesses, and the government. One of the causes of demand-pull inflation is fast growth in other countries. When other countries experience rapid economic growth, their demand for goods and services increases, leading to an increase in global demand and putting upward pressure on prices. This can lead to inflation.