|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