Which is one of the main causes of inflation?

Question

Responses

Rising unemployment cuts into national income.

Rising unemployment cuts into national income.

Consumers demand goods faster than they can be supplied.

Consumers demand goods faster than they can be supplied.

Wages drop so workers have to spend a higher percentage of income on necessities.

Wages drop so workers have to spend a higher percentage of income on necessities.

Demand drops and forces producers to charge more to meet their costs.

Answer 1

One of the main causes of inflation is:

Consumers demand goods faster than they can be supplied.

This situation, often referred to as demand-pull inflation, occurs when demand in the economy outpaces supply, leading to higher prices as consumers compete for limited goods and services.