Demand-pull inflation happens when the demand for goods ...

a) remains very low

b) shifts up and down

c) matches the supply

D) increases

The correct answer is D. when it increases or rises above the supply. It is bassically when prices rise because of an imbalance in the supply and demand. To simplify, it is when people have more money then there are goods on the market. It results from strong consumer demand. When people are purchasing the same good that will cause the price to increase, and when that happens to the whole economy that is when you have this phenomenon.