What causes demand-pull inflation?

Multiple choice question for Monetary, Fiscal And Incomes Policy, And Inflation. Select an option, then review the explanation below.

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Government spending on public goods increases without sufficient tax revenue to support it.Excessive demand from consumers, businesses, and government surpasses the economy's production ability.There is a lack of demand for goods and services exceeding their supply during an economic downturn.The demand for public goods exceeds the demand for consumer goods.

Explanation

Demand-pull inflation occurs when government expenditure on public goods rises without adequate financial support from tax collections, leading to increased overall demand in the economy.

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