inflation caused by increase in demand is known as
Answer Details
The inflation caused by an increase in demand is known as demand-pull inflation. This type of inflation occurs when the demand for goods and services increases, but the supply cannot keep up with the demand. As a result, the prices of goods and services rise as people are willing to pay more to get what they want.
Demand-pull inflation can be caused by several factors, such as an increase in consumer spending, an increase in government spending, or a decrease in taxes. When people have more money to spend, they tend to buy more goods and services, which leads to an increase in demand. If the supply cannot keep up with the demand, the prices of goods and services will rise.
In summary, demand-pull inflation occurs when there is an increase in demand for goods and services that cannot be met by the supply. This leads to a rise in prices and can be caused by factors such as an increase in consumer or government spending or a decrease in taxes.