Demand-pull inflation

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Offline munna99185

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Demand-pull inflation
« on: March 10, 2014, 02:00:18 PM »
Demand-pull inflation is a term used in Keynesian economics to describe the scenario that occurs when price levels rise because of an imbalance in the aggregate supply and demand. When the aggregate demand in an economy strongly outweighs the aggregate supply, prices increase. Economists will often say that demand-pull inflation is a result of too many dollars chasing too few goods. This type of inflation is a result of strong consumer demand. When many individuals are trying to purchase the same good, the price will inevitably increase. When this happens across the entire economy for all goods, it is known as demand-pull inflation.  [Source: http://www.investopedia.com]


Sayed Farrukh Ahmed
Assistant Professor
Faculty of Business & Economics
Daffodil International University