CAUSES OF INFLATION.
✓ Demand-Pull Inflation :-
This type of inflation is caused due to an increase in aggregate demand in the economy.
✓Cost-Push Inflation
This type of inflation is caused due to various reasons such as:
• Increase in price of inputs
• Hoarding and Speculation of commodities
• Defective Supply chain
• Increase in indirect taxes
• Depreciation of Currency
• Crude oil price fluctuation
• Defective food supply chain
• Low growth of Agricultural sector
• Food Inflation
• Interest rates increased by RBI
✓ Built – in Inflation
This type of inflation involves a high demand for wages by the workers which the firms address by increasing the cost of goods and services for the customers.
