ECONOMICS
INFLATION
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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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Demand-push inflation
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Cost-pull inflation
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Detailed explanation-1: -Demand-pull inflation causes upward pressure on prices due to shortages in supply, a condition that economists describe as “too many dollars chasing too few goods.” An increase in aggregate demand can also lead to this type of inflation.
Detailed explanation-2: -Inflation has several causes, including: supply shortages and increased demand, an increase in the cost of a good or service for which there is no replacement available or it could be due to changes in wages and subsequent price increases.
Detailed explanation-3: -Long-lasting episodes of high inflation are often the result of lax monetary policy. If the money supply grows too big relative to the size of an economy, the unit value of the currency diminishes; in other words, its purchasing power falls and prices rise.
Detailed explanation-4: -A strong economy. Supply shortfalls. A rapid increase in the supply of money. Inflation expectations. Government policy. 21-Jul-2022