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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.
Natural Factors: Seasonal variations may affect the demand for a commodity at certain times of the year. For example, during the raining season, demand for commodities such as j
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what are the limitations of economies of scale?
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Discuss two factors that would increase demand for labortion..
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