Explain the reasons for inflation in an economy.

Question

08 Oct 2024

Answer :

Word Count : 282

Inflation in an economy can occur due to several factors, broadly classified into demand-pull inflation, cost-push inflation, and built-in inflation.

Demand-pull inflation happens when aggregate demand in an economy exceeds aggregate supply. This excess demand leads to upward pressure on prices. Reasons for increased demand can include a rise in consumer confidence, increased government spending, or ____ _________ _________ __________ ________ ______ _______ ___.
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