Explore BrainMass
Share

Demand Pull Inflation

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Some events occur and the economy experiences a demand-pull inflation.

a. List the events that might cause demand-­pull inflation.

b. Describe the initial effects of a demand-pull inflation.

c. Describe what happens as a demand-pull inflation spiral proceeds.

Figure attached**

© BrainMass Inc. brainmass.com October 17, 2018, 3:39 am ad1c9bdddf
https://brainmass.com/economics/inflation/demand-pull-inflation-432016

Attachments

Solution Preview

Demand Pull Inflation:

Inflation is defined as a fall in the value of money or an instance where there is a rise in prices. It is the continuing increase in the prices of goods On the other hand demand pull inflation refers to the state whereby inflation is caused by the aggregate demand. It is also referred to as "too much money chasing too few goods". When the demand is high in the economy then this means that producers benefit a lot since they raise prices hence achieve higher profits since they are aware that demand is more than supply. This type of inflation arises due to either an increase in the government purchase meaning there is an increasing demand for goods by the government or if there is an increase in the level of prices in the rest of the world. The major factor or cause ...

Solution Summary

Demand Pull Inflation is assessed.

$2.19
Similar Posting

COST-PUSH VERSUS DEMAND-PULL INFLATION

What is the difference between cost-push and demand-pull inflation? Which was the primary cause of inflation in the early 1970's? What type of inflation has the Federal Reserve been trying to prevent in 1998 and 1999?

View Full Posting Details