What term describes a rise in consumer prices caused by higher demand for goods and services that are in limited supply?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

Explanation

Demand-pull inflation occurs when increased consumer demand for products and services exceeds their limited availability, leading to a rise in prices. This differs from cost-push inflation, which is driven by rising production costs.

Practice related questions from the same subject.

1.Which of the following best describes deflation?
2.Under what condition can two nations benefit from engaging in international trade?
3.Which of the following represents a legitimate form of currency?
4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

What term describes a rise in consumer prices caused by higher demand for goods and services that are in limited supply?

Explanation

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