Demand Pull Inflation Diagram. Former is called demand pull inflation dpi and the latter is called cost push infla tion cpi. The demand pull inflation can be shown through the below diagram as well.
Demand pull inflation is a tenet of keynesian economics that describes the effects of an imbalance in aggregate supply and demand. Former leads to a rightward shift of the aggregate demand curve while the latter causes aggregate supply curve to shift left ward. Demand pull inflation can also be shown on a phillips curve.
Demand pull inflation can also be shown on a phillips curve.
Former leads to a rightward shift of the aggregate demand curve while the latter causes aggregate supply curve to shift left ward. This was an example of demand pull inflation. Households businesses governments and. Explanation of the above demand pull inflation graph is as follows the x axis measures the aggregate demand and supply and the y axis measures the general price level.
