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Answer to Question #15057 in Macroeconomics for jack

Question #15057
Distinguish between demand pull and cost push inflation. Why might it be difficult to establish the extent to which a given rate of inflation is demand pull or cost push
Expert's answer
Demand-pull inflation: prices rise due to shortage; firms produce more and raise price to meet

Cost-push inflation: prices rise due to increasing costs of production; firms raise price in order to not
produce less.

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