WAEC Economics 2021 Objective — Question 36

Question 36 of 50 from the West African Examinations Council (WAEC) Economics 2021 Objective paper, with the correct answer and a full explanation.

36. Demand-pull inflation can be as a result of

A. increase in the cost of production.
B. excessive supply of foodstuff.
C. deficit financing by the government.Correct
D. increase in import duties.

Explanation

Deficit financing means the government spends more than it earns, injecting extra money into the economy — if unmatched by increased production, this excess demand pulls prices up (demand-pull inflation).

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