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Demand Pull Inflation

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Which of the following policies would decrease demand-pull inflation?
a. An increase in excess reserves.
b. The FED buying government securities.
c. Incomes policies.
d. A reduction in resource prices.

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Solution Summary

Based on the four choices, the solution identifies a policy that would decrease demand-pull inflation.

Solution Preview

Demand-pull inflation occurs when aggregate demand in an economy is greater than aggregate supply.

a. An increase in excess reserves ...

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