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Jul 27, 2022 · Learn about demand-pull, cost-push and built-in inflation, and how they affect prices and wages. Find out how the U.S. measures inflation with CPI and PCE indexes.
- Demand-pull inflation. This occurs when AD increases at a faster rate than AS. Demand-pull inflation will typically occur when the economy is growing faster than the long-run trend rate of growth.
- Cost-push inflation. This occurs when there is an increase in the cost of production for firms causing aggregate supply to shift to the left. Cost-push inflation could be caused by rising energy and commodity prices.
- Wage Push Inflation. Rising wages tend to cause inflation. In effect, this is a combination of demand-pull and cost-push inflation. Rising wages increase costs for firms, and so these are passed onto consumers in the form of higher prices.
- Imported Inflation. A depreciation in the exchange rate will make imports more expensive. Therefore, the prices will increase solely due to this exchange rate effect.
Jun 6, 2022 · Learn about the different types of inflation, such as hyperinflation, stagflation, and deflation, and how they affect the economy. Explore the competing explanations of Keynesian and monetarist economics for inflation.
- Jason Fernando
May 13, 2024 · Inflation is a measure of how quickly prices are increasing over time and how money loses its purchasing power. Learn about the three types of inflation (demand-pull, cost-push, and built-in) and how they affect the economy and the cost of living.
- Jason Fernando
- 1 min
Apr 19, 2024 · Inflation is a broad rise in the prices of goods and services across the economy over time, eroding purchasing power. Learn about the types, causes, and effects of inflation, as well as some historical examples and how to cope with it.
What is inflation? Have you ever been shopping and noticed that the prices of a range of things you buy have gone up? If the same things in your shopping basket cost $100 last year and now they cost $105, at a very basic level, that’s “inflation.”. More precisely, inflation is defined as ongoing increases in the overall level of prices.
Explained another way, inflation is ongoing increases in the general price level for goods and services in an economy over time. Prices can change for different reasons and in different ways. The prices of individual goods and services can change because the supply or demand for the items has changed. For example, the price of oranges can rise ...
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