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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.
Allocation Function The shifting or reallocation of production property into or out of markets based on shifts in prices for the products or services produced in that market.
#question.PROPERTIES OF INDIFFERENCE CURVES WITH TABLE AND DIAGRAM.
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total revenue
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i when should continue to produce in the short run
elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2
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