Question

According to the demand-pull theory of inflation, what is responsible for inflation?

Answer 1

Producers increase production to meet existing demand.
Consumers have too little money to spend.
Prices tend to rise if businesses cannot produce the quantity demanded by consumers.
The supply of goods causes prices to drop.

Answer 2

Well i know that without multiple choice, the answer would be:Demand for goods and services exceeds existing supply.

Answer 3

So C?

Answer 4

I am pretty sure C is right.