Which term is used to describe a rapid increase in the price of goods due to high demand?

The correct term used to describe a rapid increase in the price of goods due to high demand is demand-pull inflation. This phenomenon occurs when the overall demand for goods and services in an economy exceeds their supply, often leading to higher prices. It can be triggered by several factors, including increased consumer spending, government spending, or investments that drive demand beyond the available supply capacity.

Demand-pull inflation specifically highlights the relationship between demand and price levels, making it distinct from general inflation, which can be caused by various factors, including cost increases in production. Other options, such as price surge, generally refer to specific contexts or short-term changes rather than the broader economic implications of sustained demand leading to price increases.

Economic expansion represents a period of growth in the economy but does not inherently specify the relationship between demand and prices in the same way that demand-pull inflation does. It is important to understand these distinctions in economic terms for a clearer grasp of how various factors influence pricing in the marketplace.