Respuesta :
Demand pull inflation arises when the aggregate demand becomes more than the aggregate supply in the economy. Cost pull inflation occurs when aggregate demand remains the same but there is a decline in aggregate supply due to external factors that cause rise in price levels.
What is inflation?
In economics, inflation refers to a broad increase in the cost of products and services across the board. The purchasing power of money decreases when the general price level rises, which is why inflation is often known as a rise in prices.
Demand-pull factors, cost-push factors, and inflation expectations are the three basic causes of inflation.
Some prices go up, while others go down. When prices for goods and services rise broadly rather than simply for specific commodities, it is said to be inflation. This means that now, for every euro spent, there is less available to be purchased. In other words, inflation gradually lowers the value of a currency.
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