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


Please select the best answer from the choices provided

A
B
C
D

Answer 1

B

Demand continually exceeding supply (demand-pull inflation) causes prices to rise because too much money chases too few goods.