What are the main causes of Demand-Pul l Inflation? (1)A depreciation of the exchange rate increases the price of imports and reduces the foreign price of a country's exports.If consumers buy fewer imports,while exports grow,AD will rise and there may be a multiplier effect on the level of demand and output
What are the main causes of Demand-Pull Inflation? (1)A depreciation of the exchange rate increases the price of imports and reduces the foreign price of a country's exports. If consumers buy fewer imports, while exports grow, AD will rise – and there may be a multiplier effect on the level of demand and output
(2)Higher demand from a fiscal stimulus e.g.lower direct or indirect taxes or higher government spending.If direct taxes are reduced,consumers have more disposable income causing demand to rise.Higher government spending and increased borrowing creates extra demand in the circular flow
(2)Higher demand from a fiscal stimulus e.g. lower direct or indirect taxes or higher government spending. If direct taxes are reduced, consumers have more disposable income causing demand to rise. Higher government spending and increased borrowing creates extra demand in the circular flow
What are the main causes of Demand -Pul I Inf lation? Monetary stimulus to the economy:A fal l in interest rates may stimulate too much demand for example in raising demand for loans or in leading to house price inflation. Monetarist economists believe that inflation is caused by "too much money chasing too few goods"and that governments can lose control of inflation if they al low the financial system to expand the money supply too quickly
Monetary stimulus to the economy: A fall in interest rates may stimulate too much demand – for example in raising demand for loans or in leading to house price inflation. Monetarist economists believe that inflation is caused by “too much money chasing too few goods" and that governments can lose control of inflation if they allow the financial system to expand the money supply too quickly. What are the main causes of Demand -Pull Inflation?
What are the main causes of Demand -Pul I Inflatiion? Fast growth in other countries providing a boost to China exports overseas.Export sales provide an extra flow of income and spending into China circular flow so what is happening to the economic cycles of other countries definitely affects China
Fast growth in other countries – providing a boost to China exports overseas. Export sales provide an extra flow of income and spending into China circular flow – so what is happening to the economic cycles of other countries definitely affects China What are the main causes of Demand -Pull Inflation?
3.Cost-push inflation If there is an increase in the costs of firms,then businesses will pass this on to consumers.There will be a shift to the left in the AS. PL SRAS 2 SRAS 1 P2 P1 AD1 Y2 Y1 Real GDP(Y)
3. Cost-push inflation If there is an increase in the costs of firms, then businesses will pass this on to consumers. There will be a shift to the left in the AS