Recapitulation of Demand-Pull Inflation & Cost-Push Inflation in An Economy

Abstract

The primary purpose of this paper is to understand the dynamics of demand-pull inflation and its causes at macroeconomics level. It will also be going to establish distant relationship between cost push and demand-pull inflation threw different examples which will try to understand the effect caused by either of them on the economy. This study will make us understand the different factor effecting the demand to fluctuate based on demand driven economy which creates inflated market to the demand pushed beyond the full employment level and the limitation of scarcity of resources causing over of production cost to rise forcing the producer of goods & services to increase the cost of the good sold. Both these factors effect the inflationary condition in the given market causing the demand for money supply to increase and decrease accordingly.