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Demand Pull Inflation:
It describes a sustained increase in the general price level that is caused by a permanent increase in nominal aggregate demand. Simply, is can be viewed as an inflation that occurs as a result of increase in aggregate demand.
In Figure, an increase in aggregate demand from AD0 to AD1 given the aggregate supply creates excess demand at P0. This causes price levels to increase from P0 to P1. A new equilibrium is established at point E1 with output at Y1 and at a higher price level of P1. The continuous repetition of this process will lead to a sustained increase in the price level, which characterizes demand-pull inflation.
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Pre-Funded Pension: A pension plan in that funds are invested and accumulated throughout an individual's working life in order to pay for subsequent disbursement of pension benefit
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all information about demand analysis
Problem: i) What might be the possible causes of inflation according to economic theory? ii) Taking stable prices and full employment as two macroeconomic objectives of gov
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