Demand-pull inflation is typically caused by rapidly rising costs of production.

Question

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Demand-pull inflation is caused by an increase in demand for goods and services that outstrips the supply of these goods and services. This leads to an increase in prices due to the greater demand. Rapidly rising costs of production can lead to cost-push inflation, where producers increase prices to cover their increased production costs.

Demand-Pull Inflation Is Typically Caused by Rapidly Rising Costs of Production