CFA Practice Question

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CFA Practice Question

Demand-pull inflation can be caused by ______.

I. increases in investment
II. increases in exports
III. increases in imports
IV. a restrictive fiscal policy
V. an expansionary monetary policy
VI. an appreciation of home currency
Correct Answer: I, II and V

User Contributed Comments 6

User Comment
cong VI is wrong because appreciating domestic currency leads more leakage (imports) than injections (exports)
Gooner7 How is I right? An increase in investment leads to an increase in GDP [GDP = C + I + G + (net exports)]
bidisha gooner: increase n investment -> increase in GDP growth-> inflation
geofin Investments is a component of Aggregate Demand. Therefore, it can play role in the demand-pull inflation.
schweitzdm I hate econ...
choas69 add me to the list
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