What is characterized by excess demand leading to high inflation in economic terms?

The scenario described involves excess demand, which can lead to high inflation, typically present during a boom period in the economy. A boom period is characterized by robust economic growth, increased consumer spending, and enhanced business investment. During such times, demand for goods and services often outstrips supply, creating upward pressure on prices and thus resulting in inflation.

In a boom, economic indicators such as output and employment levels are high, contributing to this imbalanced demand. Increased consumer confidence and spending contribute to this phenomenon. As businesses struggle to keep up with the heightened demand, they may raise prices, resulting in inflationary pressures.

The other options, such as recession, market equilibrium, and stagflation, do not match the characteristics set out in the question. A recession typically signifies declining economic activity and lower demand, market equilibrium denotes a balance between supply and demand where prices remain stable, and stagflation indicates a scenario where inflation occurs simultaneously with stagnant economic growth and high unemployment. Thus, the correct choice, reflecting the dynamics of excess demand and high inflation, is the boom period.