Question

Which of the following is a correct statement? Multiple Choice A supply shock will cause a variation of demand-pull inflation that can lead to hyperinflation. Demand-pull inflation will continue so long as there is excess total spending in the economy. It is relatively easy to distinguish between cost-push and demand-pull inflation even if you don't know the source of the inflation. Demand-pull inflation is usually accompanied by higher unemployment rates.

Answer 1

Demand-pull inflation will continue so long as there is excess spending in the economy

Step-by-step explanation:

In Keynesian economics, demand pull inflation represents an imbalance between aggregate demand and aggregate supply. When aggregate demand is higher than aggregate supply, there is an excess demand for goods and services, and that will cause the general price level to rise (inflation).

Answer 2

B) Demand-pull inflation will continue so long as there is excess spending in the economy

Step-by-step explanation: