An expansionary U.S. fiscal policy might unintentionally cause demand-pull inflation if:

A)
the dollar unexpectedly appreciates while the expansionary policy is in place.
B)
our trading partners experience recession during the time of the fiscal policy action.
C)
the policy produces severe crowding out.
D)
the dollar unexpectedly depreciates while the expansionary policy is in place.

ANSWER:

D)
the dollar unexpectedly depreciates while the expansionary policy is in place.