Demand Pull Inflation Cost Push Inflation Diagram. The other is demand pull inflation. An increase in the prices of raw materials and other components this might be because of a rise in commodity prices such as oil copper and agricultural products used in food processing.
The result is that the pressure of demand is such that it cannot be met by the currently available supply of output. Cost push and demand pull inflation. Cost push inflation is inflation caused by rising prices of inputs that cause factor 2 decreased supply of goods inflation.
The cost push inflation can also be illustrated with the aggregate demand and supply curves.
Dichotomy in inflation theory. Dichotomy in inflation theory. It is designed for as economists preparing for unit 2 but is also useful revision for students revising for unit 6. It starts with an increase in consumer demand.
