Demand inflation can be defined as too many dollars chasing too few goods.Group of answer choicesTrueFalse

The statement "Demand inflation can be defined as too many dollars chasing too few goods" is True.

Explanation:

Demand inflation occurs when the demand for goods and services exceeds their supply. This phenomenon can lead to an increase in prices, as consumers are willing to pay more to obtain the limited goods available. The phrase "too many dollars chasing too few goods" aptly describes this scenario, indicating that an influx of money in the economy is chasing a limited quantity of products, thus driving up prices. This situation often results from increased consumer spending, government expenditure, or easy monetary policy.

In summary, the relationship between demand and supply is crucial in understanding inflation, and the statement reflects this economic principle accurately.