ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Answer and Explanation: The above statement is True. Reason: Demand pull inflation happens when the aggregate demand in the economy is greater than the aggregate supply of goods and services which can be produced in the economy.

Detailed explanation-2: -Demand-pull inflation is when there is an increase in aggregate demand, and the supply remains the same or decreases. When supply cannot meet growing demand, prices for goods and services are pulled higher.

Detailed explanation-3: -Demand-pull inflation is a tenet of Keynesian economics that describes the effects of an imbalance in aggregate supply and demand. When the aggregate demand in an economy strongly outweighs the aggregate supply, prices go up. This is the most common cause of inflation.

Detailed explanation-4: -Demand-pull inflation arises when the total demand for goods and services (i.e. ‘aggregate demand’) increases to exceed the supply of goods and services (i.e. ‘aggregate supply’) that can be sustainably produced.

Detailed explanation-5: -Demand-pull inflation is a type of inflation that is caused when there is an increase in consumer demand for goods and services. This causes prices to go up as businesses try to meet the increased demand because of a lack of needed supply.