Main factors of inflation in Singapore: (Essay Example.
Despite its simple definition, inflation can be an incredibly complex topic. In fact, there are several types of inflation, which are characterized by the cause that is driving the increase in prices. Here we will examine two types of inflation: cost-push inflation and demand-pull inflation.
The term “inflation” once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation. Inflation can also be described as a decline in the real value of money-a loss of purchasing power in the medium of exchange which is also the.
Demand pull inflation occurs when aggregate demand and output is growing at an unsustainable rate leading to increased pressure on scarce resources and a positive output gap. When there is excess demand in the economy, producers are able to raise their prices and achieve bigger profit margins because they know that demand is running ahead of supply.
Cost-push inflation occurs when the supply of a good or service changes, but the demand for it stays the same. It occurs most often when a monopoly exists, wages increase, natural disasters occur, regulations are introduced, or exchange rates change. Cost-push inflation is rare.
Demand-pull inflation A theory of inflation or price increases resulting from so-called excess demand. Related: Cost-push inflation. Demand-Pull Inflation In Keynesian economics, a significant increase in prices that occurs when there is an increase in demand for goods and services such that the increase outpaces supply. The equivalent of demand-pull.
Essay on Inflation:- 1. Meaning of Inflation 2. Features of Inflation 3. Types 4. Demand-Pull and Cost-Push Inflation 5. Causes 6. Factors Causing Decrease in Supply 7. Inflation in Underdeveloped Countries 8. Inflation and Economic Development 9. Inflation Tax. Essay on the Meaning of Inflation: For a layman, inflation means a substantial and rapid increase in the general price level which.
The Demand-Pull Inflation! This represents a situation where the basic factor at work is the increase in aggregate demand for output either from the government or the entrepreneurs or the households. The result is that the pressure of demand is such that it cannot be met by the currently available supply of output. If, for example, in a situation of full employment, the government expenditure.