ENTREPRENEURIAL PLANNING
FINANCIAL PLANNING AND ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Choose the correct statements regarding demand pull inflation (2 correct answers)
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Increase in the price level caused by sharp rises in the cost of key resources
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Increase in the price level caused by excessive spending beyond the economy’s capacity to produce
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Rising average cost of a particular level of output cause the price of the output to goes up even if there are no excessive spending
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Resources are fully employed causing supplier not able to increase production to support the demand.
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Explanation:
Detailed explanation-1: -The correct answer is e. When the aggregate expenditure exceeds the aggregate supply, there is a shortage of goods and services in the economy. This leads to an increase in the general price level of goods and services leading to demand-pull inflation.
Detailed explanation-2: -Demand-pull inflation can be caused by an expanding economy, increased government spending, or overseas growth.
There is 1 question to complete.