Cause of rising and falling inflation
Answers
Answer:Increase in public spending, hoarding, tax reductions, price rise in international markets are the causes of inflation. These factors lead to rising prices. Also, increasing demands causes higher prices which leads to Inflation.
Explanation:
Answer:
The correct answer to this question is excess aggregate demand (AD), or economic growth that is too rapid, or cost-push forces, are the major drivers of inflation.
Explanation:
Given - rising and falling inflation.
To Find - Cause of rising and falling inflation.
The pace at which the prices of goods and services in an economy are growing is known as inflation. Price rises brought on by rising production costs, such as those for labor and raw materials, can result in inflation. As people are prepared to pay more for the product, an increase in demand for goods and services can lead to inflation.
Demand-pull inflation, cost-push inflation, and built-in inflation are the three basic sources of inflation.
Excess aggregate demand (AD), or economic growth that is too rapid, or cost-push forces, are the major drivers of inflation.
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