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What is the difference between demand-pull inflation and cost-push inflation?

Posted on April 16, 2014 at 10:10 AM

Demand-pull inflation is caused by an increase in aggregate demand. This means that buyers are pulling up the general price level of goods and services within an economy.


Cost-push inflation is caused by a decrease in short-run aggregate supply. This means that an increase in production costs (resource prices) have caused an increase in the general price level.


AP Macroeconomics Unit 2 Measuring Economic Performance

Categories: AP Macroeconomics, Macro Unit 2 Measuring Economic Performance

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