Inflation rate is showing the rising price level of the economy. There are two causes of inflation, demand pull inflation and cost push inflation. Suppose the Government expenditure (G) rises continuously. As a result, price level of the economy rises too. Does it create demand pull inflation or cost push inflation? Explain and show with the help of the diagram?

Inflation rate is showing the rising price level of the economy. There are two causes of inflation, demand pull inflation and cost push inflation. Suppose the Government expenditure (G) rises continuously. As a result, price level of the economy rises too. Does it create demand pull inflation or cost push inflation? Explain and show with the help of the diagram?

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter17: Stabilizing The National Economy

Section: Chapter Questions

Problem 24AA

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