causes of inflation- demand-pull, cost push

Question 1

difference between demand and cost inflation

Answer 1

-inflation due to rise in demand. more pressure on existing factors of production, price will rise and be passed on
-sras shift: increase in cost of production

Question 2

causes of demand pull

Answer 2

-decrease IR
-decrease in tax
-increase confidence
-higher gov spending
-weak exchange rate

Question 3

causes of cost push inflation

Answer 3

-increase raw materials
-increase wages
-increase business tax
-increase in imports