Praxis II Citizenship

Answer: B - Demand-pull inflation occurs when the aggregate demand is greater than the aggregate supply. Demand-pull inflation is a Keynesian economics term that describes the rise in consumer cost that results when there is not enough of a product to meet the needs of all the buyers who want the product. Demand-pull inflation begins with the consumer (increase in demand) whereas cost-push inflation begins with the costs of production (increase in costs of production).