Demand-pull inflation occurs when
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Answer:
consumers begin purchasing more goods
Explanation:
Inflation is the continuous rise in prices. When the economy is heated, consumers tend to increase consumption. Demand inflation occurs when demand for goods increases significantly, making products scarcer. This is backed by the theory of supply and demand, which explains that the scarcity of a highly demanded good raises its price. Thus, as the quantity of inventories of goods decreases, the selling price increases, causing inflation.