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# Difference between cost-push and demand-pull inflation

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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?

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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?

In economics, inflation is an increase in the general level of prices of a given kind. General inflation is referred to as a rise in the general level of prices. General inflation is a fall in the market value or purchasing power of money within an economy, as compared to currency devaluation which is the fall of the market value of a currency between economies.

Inflation is the opposite of deflation. Disinflation refers to slowing the rate of inflation, that is, prices are still rising, but at a slower rate than before. Reflation is a term used to denote inflation after a period of deflation, meaning inflation designed to restore prices to a previous level.

Inflation is measured by taking a ...

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This explains the difference between cost-push and demand-pull inflation

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## Aggregate Supply and Aggregate Demand

A. Draw the aggregate demand-aggregate supply model of the macroeconomy for the short run, assuming that economy is in the expansionary phase of the business cycle. Label the aggregate demand curve as AD and the aggregate supply curve as AS. be sure to label the axes appropriately.

B. Identify and describe changes in the AS-AD graph above, that would result from cost-push inflation.

C. Identify and describe changes in the AS-AD graph above, that would result from demand-pull inflation.

D. Identify and describe changes in the AS-AD graph above, that would result from the implementation of contractionary fiscal policy.

E. Identify and describe changes in the AS-AD graph above that would result from the implementation of an easy monetary policy.

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