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4.6.4 causes of inflation: cost-push and demand-pull inflation

What causes demand-pull inflation?

A

Lower production costs - firms reduce prices as productivity improves.

B

Excess aggregate demand - total spending outpaces the economy’s capacity to produce.

C

Reduced consumer confidence - households cut spending on goods and services.

D

Falling aggregate demand - total spending declines below the economy’s capacity to produce.

4.6.4 causes of inflation: cost-push and demand-pull inflation Flashcards

  1. Intl A Level
  2. /Economics
  3. /4.6.4 causes of inflation: cost-push and demand-pull inflation

25 flashcards on CIE Intl A Level Economics 4.6.4 causes of inflation: cost-push and demand-pull inflation: the key terms and definitions you need to recall.