CAUSES OF INFLATION
Topic: 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.
