ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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demand-pull inflation
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cost-push inflation
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Either A or B
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None of the above
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Detailed explanation-1: -Demand-pull inflation explains rising prices in an economy as the result of increased aggregate demand that surpasses supply. As consumers demand more given limited supply, prices are bid higher.
Detailed explanation-2: -Demand-pull inflation is a type of inflation that is caused when there is an increase in consumer demand for goods and services. This causes prices to go up as businesses try to meet the increased demand because of a lack of needed supply. This is historically the most common cause of inflation.
Detailed explanation-3: -This increased demand is “pulling” up prices. Employment is rising also which means consumers have more disposable income. Gasoline demand and prices are rising as more employees drive to work. Airline tickets and hotel rooms are also rising as pent-up consumers increase travel.