Which scenario is an example of demand-pull inflation? consumers have more money to buy cars, and the prices of cars and car accessories rise as a result. an increase in workers’ wages raises the production cost of cars, and car prices rise as a result. the demand for cars falls as consumers have less disposable income, and car prices fall as a result. a government bailout car manufacturers lower their costs, and car prices fall as a result.

Hi,

The correct answer option is (A) Consumer have more money to buy cars, and the prices of car and car accessories rise as a result.

Explanation:

Demand-pull inflation happens when there is an increase in aggregate demand categories by households, businesses, government and foreign buyers which outstrips aggregate supply. It can be initiated by an increase in consumer demand,making sellers to meet this increase with additional supply but  when the supply is unavailable, sellers raise their prices. This is a common cause of inflation.

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