What are the primary causes of inflation?

The primary causes of inflation encompass demand-pull, cost-push, and built-in inflation, making this the correct choice.

Demand-pull inflation occurs when the demand for goods and services exceeds supply, leading to an increase in prices as businesses capitalize on higher demand. This can happen in a growing economy where consumer confidence rises, prompting increased spending.

Cost-push inflation arises from increased costs of production, such as labor or raw materials. When businesses face higher costs, they typically pass these along to consumers in the form of higher prices.

Built-in inflation is related to the way businesses and workers expect prices to change over time. It often involves wage-price spiral dynamics where wages increase in anticipation of future price increases, causing businesses to raise prices further to maintain profitability.

Understanding these three components allows for a comprehensive grasp of how inflation can be influenced by various economic factors, making this combination a fundamental explanation of the phenomenon. The other options, while they address certain aspects of economic conditions, do not capture the central mechanisms that lead to persistent inflation in an economy.