Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Demand-pull inflation
B
Cost-push inflation
C
Built-in inflation
D
Hyperinflation
Understanding the Answer
Let's break down why this is correct
Answer
The type of inflation caused by rising demand in the economy is called demand-pull inflation. This happens when more people want to buy goods and services than what is available. For example, if a new video game console becomes very popular and many people want to buy it, but there are only a limited number of consoles available, the price will go up because of the high demand. As businesses see that people are willing to pay more, they may raise prices for other products too. This overall increase in prices due to high demand is what we refer to as demand-pull inflation.
Detailed Explanation
This type of inflation happens when many people want to buy things. Other options are incorrect because Some might think this is about demand, but it's really about costs; This type is often confused with demand.
Key Concepts
Types of inflation
Topic
Inflation and Trade Effects
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.