The demand cost-push inflation is different from cost-push inflation because the demand-pull inflation arises when the prices of goods and services increase due to increase in demand while the cost-push inflation arises when the prices of goods and services increase due to an increase in production costs.
Further Explanation:
Demand-pull Inflation: This type of inflation arises due to increase in demand increasing and goods.As the demand and prices are inversely proportional. The increased demand puts pressure on the prices which leads to an increase in prices of services and goods. The monetary measures like high-interest rates and fiscal policy that involves low government expenditure and high taxes are used to curb demand-pull inflation.
Cost-push inflation: This type of inflation arises due to an increase in the production cost of services and goods. The producer raises the price of services and goods because the cost of production can rise. They transfer the high production cost to the consumer. The cost production includes labor cost and material cost.high-interest deflationary fiscal policy and monetary policy that involves high rates and reduces consumer spending are used by the government to curb inflation.
Learn more:
1. Learn more about inflation
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2. Learn more about Cost-push rate
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3.Learn more about the inflation rate and economy
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Answer details:
Grade: Middle School
Subject: Economics
Chapter: Inflation
Keywords: Difference between demand-pull inflation and cost-push inflation
, economics.
Answer: View image below.
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