Question

whatcauss demand-inflation

Answer 1

Demand inflation is generally termed as demand pull inflation.
The five most important causes of demand pull inflation are:

1. A growing economy: consumer spends more because they feel confident about their income and also they take more developed which leads to increase in demand and hence the price rises
2. Increased Government spending. When the Government of a particular country spends more freely than the prices increase
3. Flow more money in system. When an expansionary policy is taken the money supply increases goods to becomes less which increases price.
4. An asset inflation when the export of a country suddenly rises then the currency e involved gets undervalued which again increases price.

5. Inflation expectations. Companies tries to increase the prices of product with expectation of an inflation in near future.

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