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In Economics / Senior High School | 2025-05-23

Which type of inflation is caused by too much money chasing too few goods?
A. Cost-push inflation
B. Deflation
C. Demand-pull inflation
D. Hyperinflation

Asked by shyshyleyte984

Answer (1)

The correct answer is C. Demand-pull inflation happens when there’s high demand for goods and services, but supply cannot keep up. This causes prices to rise. It’s common during economic booms when people have more money to spend. For example, during holidays like Christmas in the Philippines, we sometimes see demand-pull inflation as many people buy gifts, food, and clothes, increasing prices temporarily.

Answered by Sefton | 2025-05-26