What must happen to create a demand$-$pull inflation spiral?

A$.$ Labor unions must push up wage rates.

B$.$ The government must run a budget deficit.

C$.$ The quantity of money must persistently increase.

D$.$ The Fed must raise interest rates.

The graph shows three $\backslash ($ A D $\backslash )$ curves and three $\backslash ($ S A S $\backslash )$ curves for an economy that begins at point $\backslash ($ A $\backslash ).$

Draw a point to show the new equilibrium when the Fed increases the quantity of money. Label it $\backslash ($ B $\backslash ).$

Draw a point to show the new equilibrium when the money wage rate rises. Label it $\backslash ($ C $\backslash ).$

Draw a point to show the new equilibrium when the Fed increases the quantity of money again. Label it D$.$

Draw a point to show the new equilibrium when the money wage rate rises again. Label it $\backslash ($ E $\backslash ).$

In a demand$-$pull inflation spiral, the economy moves from

A$.$ an above full$-$employment equilibrium; a below full$-$employment equilibrium

B$.$ a below full$-$employment equilibrium; a full$-$employment equilibrium

C$.$ a period of low inflation; a period of higher inflation

D$.$ an above full$-$employment equilibrium; a full$-$employment equilibrium

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