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JAMB Economics 2003 Question 25

Question 25

Money and Inflation

Inflation that is usually associated with periods of trade boom is

  1. A.creeping inflation
  2. B.cost-push inflation
  3. C.stagflation
  4. D.demand-pull inflation
Show the answer and explanation

Answer: D (demand-pull inflation)

Explanation

In a boom, spending rises faster than output, so too much money chases too few goods: demand-pull inflation.