DMPQ- Explain the following term: • Demand pull inflation • Cost Push Inflation

Demand Pull Inflation:  The term demand-pull inflation usually describes a widespread phenomenon. That is, when consumer demand outpaces the available supply of many types of consumer goods, demand-pull inflation sets in, forcing an overall increase in the cost of living.  When demand surpasses supply, higher prices are the result. This is demand-pull inflation. A low unemployment rate is unquestionably good in general, but it can cause inflation because more people have more disposable income. Increased government spending is good for the economy

Cost Push Inflation:  Cost-push inflation occurs when overall prices increase (inflation) due to increases in the cost of wages and raw materials. Higher costs of production can decrease the aggregate supply (the amount of total production) in the economy. Since the demand for goods hasn’t changed, the price increases from production are passed onto consumers creating cost-push inflation.

The most common cause of cost-push inflation starts with an increase in the cost of production, which may be expected or unexpected. For example, the cost of raw materials or inventory used in production might increase, leading to higher costs.

Cost-Push vs. Demand-Pull

Rising prices caused by consumers is called demand-pull inflation. Demand-pull inflation includes times when an increase in demand is so great that production can’t keep up, which typically results in higher prices. In short, cost-push inflation is driven by supply costs while demand-pull inflation is driven by consumer demand—while both lead to higher prices passed onto consumers.

Our CGPSC Notes Courses

PDF Notes for Prelims Exam

Printed Notes for Prelims Exam

Mock Test Series for Prelims Exam

PDF Notes for Mains Exam

Printed Notes for Mains Exam

Mock Test Series for Mains Exam

Daily Mains Answer Writing Program

CGPSC Mains Exam

CGPSC Prelims Exam

Admit Card

Syllabus & Exam Pattern

Previous Year Papers

Eligibility Criteria

Results

Answer Key

Cut Off

Recommended Books

Exam Analysis

Posts under APPSC

Score Card

Apply Online

Selection Process

Exam Dates

Exam Highlights

Notifications

Vacancies

Exam Pattern

Prelims Syllabus

Mains Syllabus

Study Notes

Application Form

Expected Cut-Off

Salary & Benefits

Mock Tests

Preparation Tips

Study Plan

State Service Examination (SSE)

Civil Judge (Junior Division)

Assistant Director (Public Relations)

Assistant Director (Social Welfare)

Assistant Director (Agriculture)

Assistant Professor

Medical Officer

Specialist Medical Officer

Dental Surgeon

Lecturer (Technical Education)

Assistant Geologist

Scientific Officer

Assistant Director (Industries)

Cooperative Inspector

Assistant Registrar

Assistant Jail Superintendent

Excise Sub Inspector

Naib Tehsildar

State Tax Inspector

Assistant Engineer (Civil)

Assistant Engineer (Electrical)

Assistant Engineer (Mechanical)

Assistant Engineer (Agriculture)

Assistant Engineer (Water Resources)

Assistant Engineer (Public Health Engineering)

Assistant Engineer (Panchayat and Rural Development)

Assistant Engineer (Urban Administration)

Assistant Engineer (Housing and Environment)

Assistant Engineer (Energy)

Assistant Engineer (Transport)

Assistant Engineer (Commerce and Industry)

Assistant Engineer (Forest)

Assistant Engineer (Fisheries)

Assistant Engineer (Animal Husbandry)

Assistant Engineer (Food and Civil Supplies)

Assistant Engineer (Cooperative)

Assistant Engineer (Labour)

Assistant Engineer (Women and Child Development)

Assistant Engineer (Minority Welfare)

Assistant Engineer (Scheduled Castes Welfare)

Assistant Engineer (Scheduled Tribes Welfare)

Assistant Engineer (Backward Classes Welfare)

Assistant Engineer (Panchayati Raj)

Assistant Engineer (Rural Development)

Assistant Engineer (Urban Development)

Veterinary Assistant Surgeon

AYUSH Medical Officer

Lab Technician

Librarian

Sports Officer

Lecturer (DIET)

Principal (ITI)

Lecturer (Sociology/College Education)

Labour Officer

Food Safety Officer

Assistant Statistics Officer

Probation Officer

Horticulture Development Officer

Archaeologist

Chemist

error: Content is protected !!