20
QuizMultiple Choice

4.4 Inflation and Stagflation

Question 20 • (OC27) Economics-2102310-Sem-Meadows

How does demand-pull inflation differ from cost-push inflation?

Answer
A
Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.
B
Demand-pull inflation is driven by producers, while cost-push inflation is driven by consumers.
C
Demand-pull inflation is driven by the private sector, while cost-push inflation is driven by the government.
D
Demand-pull inflation is driven by the government, while cost-push inflation is driven by the private sector.

Explanation

Demand-pull inflation occurs when strong overall demand for goods and services pushes prices upward; consumers are one important source of that demand. Cost-push inflation occurs when producers face higher costs, such as wages or raw materials, and raise prices in response. So the key difference is demand from buyers versus rising costs for producers, making A correct.

AI-written and checked against the verified answer.

Previous
Next