Friday, April 06, 2012

define Cost-push inflation, Demand-pull inflation, Low Inflation, stagflation

1. Cost-push inflation is a type of inflation caused by substantial increases in the cost of important goods or services where no suitable alternative is available.

2. Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply.

3. Low Inflation is a phenomenon when the prices of goods and services do not increase rapidly. This situation is not much harmful for any economy because it could be controlled by the adoption of certain measures unlike high inflation which is almost uncontrollable.

4. stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment remains steadily high.

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