Question 10 (1 point) B What is demand-pull inflation caused by? Excessive wage

Question

Question 10 (1 point) B What is demand-pull inflation caused by? Excessive wage demands by labour unions which force up costs of production. OB) High interest rates demanded by lenders. C) Attempts by firms to obtain increased profits. D) Aggregate expenditures exceeding the economy's capacity to produce. E) The increased demand for imported goods. Save Question 11 (1 point) Which of the following is a variation of cost-push inflation? A) Demand-pull inflation. B) Profit-push inflation. C) Import-pull inflation. D) Export-push inflation.

Explanation / Answer

1) (D) Demand pull inflation is the inflation resulting due to demand side factors. Demand pull inflation is caused byAggregate expenditures in the economy exceeding the economy's capacity to produce.

2) (C) Cost push inflation takes place due to rise in inputs cost which leads to increase in cost of production and then results in higher inflation. A variant of cost push inflation is import pull inflation which is inflation caused due to rise in import price of inputs like oil,coal etc.

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