Question 1 (Inflation and the Macroeconomy) Distinguish between demand-pull inflation and cost-push inflation and then use...

Question 1 (Inflation and the Macroeconomy)
Distinguish between demand-pull inflation and cost-push inflation and then use an AD-AS (aggregate demand/aggregate supply) model to illustrate the theoretical effects of these two types of inflation on the price level (P), employment (L) and economic growth (real GDP) in the short run. Now identify the various factors that have contributed towards demand-pull inflation and cost-push inflation in South Africa and critically analyse whether they are consistent with the predictions of the AD-AS model.

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Expert Solution

And yes, the factors that contributed towards demand pull and cost push inflation in South Africa are consistent with AD-AS model.

Rahul Sunny answered 1 year ago

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