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21 August, 20:45

What is the main cause of inflation

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  1. 21 August, 22:31
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    Inflation can be defined as the sustained or continuous increase in the prices of the products and services. There are two main causes of inflation which are manifested below:

    1: Demand-pull

    2: Cost-push

    In both of the above given types of inflation, prices are increased in an economy. Demand pull inflation happens when there is huge demand of the products and services from the consumer's end, which therefore, encourages the sellers to increase the prices whereas in cost push inflation when the prices of the supply increases, therefore, production costs are risen which therefore forces prices to increase ultimately.
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