Which theory explains inflation caused by an excess of demand over supply, leading to rising prices?

Show Answers

Theory of demand curvesInflation driven by rising production costsInflation triggered by excess demandInflation caused by demand pressure

Explanation

Option A refers to demand curve theory, which is not specifically about inflation. Option B describes cost-push inflation, caused by increased production expenses. Option C, demand-pull inflation, occurs when demand exceeds supply, pushing prices up. Option D is a misnomer similar to demand-pull inflation but not the correct term.