Which type of inflation is caused by increased consumer demand for products and services?

Demand-pull inflation occurs when the overall demand for goods and services in an economy exceeds the available supply. This type of inflation is typically fueled by increased consumer spending, often due to rising incomes, lower interest rates, or strong consumer confidence. When consumers are eager to purchase more products and services, businesses may struggle to keep up with this demand, leading to rising prices as they increase their prices in response to the heightened competition for available goods.

In contrast, cost-push inflation arises from increases in the costs of production, such as higher wages or increased prices for raw materials, which compel producers to raise their prices to maintain profit margins. Stagflation refers to a situation where inflation occurs alongside stagnant economic growth and high unemployment, creating a challenging economic environment. Intrinsic inflation is not a recognized economic term and does not pertain to inflation types typically analyzed in business studies.

Therefore, understanding that demand-pull inflation is driven by increased consumer demand clarifies why it is the correct answer to the question.