Demand-pull inﬂation and cost-push inﬂation are identical concepts because both involve lower
unemployment rates and rising prices.

Question

Quizplus · Accepted Answer

Demand-pull inflation occurs when there is excess demand for goods and services, leading to an increase in prices. Cost-push inflation occurs when there is a decrease in supply, such as an increase in production costs or a decrease in the availability of resources, leading to an increase in prices. While both can lead to rising prices, they have different causes. Additionally, lower unemployment rates may contribute to demand-pull inflation but are not a defining factor.

Demand-Pull Inﬂation and Cost-Push Inﬂation Are Identical Concepts Because Both