Demand-pull Inflation (Noun)
Meaning
Inflation caused by an increase in demand or in the supply of money.
Classification
Nouns denoting natural processes.
Examples
- As the economy recovered, a surge in consumer spending led to demand-pull inflation, driving up prices for goods and services.
- Demand-pull inflation can be triggered by a combination of factors, including an increase in aggregate demand, a decrease in taxes, or a boost in government spending.
- During periods of economic boom, demand-pull inflation can be a significant challenge for monetary policymakers seeking to maintain price stability.
- Some critics argue that expansionary monetary policies, such as quantitative easing, can lead to demand-pull inflation, particularly if the increase in the money supply is not matched by corresponding economic growth.
- A sustained period of demand-pull inflation can have serious consequences, including decreased purchasing power for consumers, increased production costs for businesses, and potential destabilization of the financial system.