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Explain the following types of inflation: (i) demand-pull inflation (ii) cost-push inflation (iii) imported inflation (iv) structural inflation.

      

Explain the following types of inflation:
(i) demand-pull inflation
(ii) cost-push inflation
(iii) imported inflation
(iv) structural inflation.

  

Answers


Davis
(i) Demand- Pull inflation-(refers to a progressive increase in the genera level of prices) brought
about by an expansion in demand. There is too much money chasing -for few goods/caused by excess
demand.
(ii) Cost push inflation – (A progressive increase in the general price level) brought about by general
increase in the cost of production which .is -passed on /transferred to consumers .
(iii) Imported inflation -(refers to an increase in domestic prices) resulting from importation of
( primary) goods/service /inputs/higher prices from countries suffering –Inflation which increases
Cost of production /passed on to consumers.
(iv) Structural inflation.- refers to persistent rise in prices) resulting from failure of the economy to
meet the general increase in demand / caused by govt policy that brings imbalance between
demand and supply
Githiari answered the question on September 23, 2017 at 10:10


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