Over the past decade, the demand for goods produced in China has brought a sustained increase in demand for China's exports that has out-stripped the growth of supply. As a result, China has experienced a _______
A. period of stable prices and sustained economic growth
B. rising price level and demand-pull inflation
C. rising price level and cost-push inflation
D. rising price level and a falling real wage rate
B Aggregate demand has increased far more than aggregate supply, so the price level has risen and the economy has had a demand-pull inflation.
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