What is inflation and how is it explained from the demand and supply perspectives?
Inflation is the sustained increase in the general level of pri...
What is inflation and how is it explained from the demand and supply perspectives?
Inflation is the sustained increase in the general level of prices. Inflation can be explained from both the demand and supply perspectives. From the demand perspective, inflation occurs when there is an increase in the demand for goods and services but no increase in their production. From the supply perspective, inflation occurs when there is an increase in the prices of imported goods, capital goods, or raw materials.
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