Question

Which of the following is a cause of inflation?
a.
consumers growing apathetic and failing to notice attempts to raise prices
b.
demand continually exceeding supply, leading to an imbalance of money and goods in the market
c.
a natural consequence of the use of money instead of trade goods
d.
government intervention demanding that prices be raised

Answer 1

b. demand continually exceeding supply, leading to an imbalance of money and goods in the market

Explanation: This describes demand-pull inflation — "too much money chasing too few goods." (Other causes include cost-push inflation, but the best choice here is b.)