What are the causes of inflation that pull up demand

Endless ** investment The money supply grows larger.

To put it simply. There are fewer things and more demand, and it is naturally expensive.

Which of the following factors can cause demand-pull inflation (ABC)AExcessive expansionary fiscal policy.

b.Excessively expansionary monetary policy.

c.Sudden changes in spending habits.

d.Poor harvests in agriculture.

e.A sudden decrease in labor productivity.

If there is demand-pulling inflation, it should be cured with measures to reduce spending and raise taxes.

When demand-pull inflation occurs, contractionary fiscal policy can help control inflation by cutting spending, raising taxes, or using a combination of the two, as opposed to expansionary measures.

The actual factors that cause demand-pull inflation are as follows:

1. ** Fiscal expenditure exceeds fiscal revenue and forms a fiscal deficit, and mainly relies on fiscal overdraft to make up for it;

2. The total demand for domestic investment exceeds the sum of total domestic savings and foreign capital inflows, forming the so-called "investment inflation";

3. The total demand for domestic consumption exceeds the sum of the supply of consumer goods and imported consumer goods, forming the so-called "consumption inflation". Any one of these three factors comes into play, and all else being equal, leads to a gap between aggregate demand and aggregate supply, which can only be bridged by prices, which causes inflation.

From the perspective of monetary factors, demand-pull inflation can be generated in two ways:

1. The demand for money in economic operation is greatly reduced, so even if there is no abnormal growth in currency, the original money stock will be relatively excessive;

2. When the demand for money remains unchanged, the currency ** increases too much. In general, the latter is the main contributor to demand-pull inflation due to monetary factors.

The difference between inflation and deflation is as follows:

1. The meaning and essence are different, inflation refers to the economic phenomenon that the issuance of paper money exceeds the amount required in circulation, which causes the depreciation of paper money and the price of goods, and its essence is that the total social demand is greater than the total social supply; Deflation is an economic phenomenon opposite to inflation, which refers to the economic phenomenon that the overall price level continues to decline for a long time and the currency continues to appreciate during the period of relative economic contraction.

2. The most direct manifestation of inflation is the depreciation of paper money, the reduction of prices, and purchasing power. Deflation is often accompanied by a decline in production, a shrinking market, a decrease in corporate profit margins, a decrease in production investment, an increase in unemployment, a decline in incomes, and a lack of economic growth. It is mainly manifested in the low prices, most goods and services.

Demand-driven inflation, also known as excess demand inflation, refers to the fact that aggregate demand exceeds aggregate supply, resulting in a sustained and significant overall price level. This inflation is considered "too much money and too few goods".

Demand pull refers to the fact that the advertising curve moves to the upper right, because the aggregate supply remains unchanged in the long run, so under the new equilibrium, but the supply remains the same, resulting in inflation.

AD is the aggregate demand curve, and so is the aggregate supply curve. The aggregate supply curve at the initial level. This means that when total production is low, an increase in total demand does not lead to ****.

The intersection of the aggregate demand curve and the aggregate supply curve determines the level of output from zero to a stable level. When the total output is reached, the increase in the total supply will encounter the so-called bottleneck phenomenon in production, that is, the shortage of labor, raw materials, production equipment, etc., will increase the cost, which will lead to an increase in the ** level.

As the aggregate demand curve AD continues to rise in the chart, the aggregate supply curve AD begins to gradually slope to the upper right, and the ** level gradually rises.

1. Increase aggregate supply. For example, reducing import tariffs and adopting structural tax cuts for industries with increased demand concentration.

2. Reduce demand. For example, contractionary monetary policy, restricting lending, etc.

Demand-pull inflation is an inflationary phenomenon caused by market demand exceeding that of commodities. The reason for its premature growth is often due to the presence of some specific conditions, such as:

1.The excessive easing of monetary policy has led to an increase in the amount of money, making funds cheaper, thereby increasing the ability of consumers to buy goods.

2.Increased spending, such as investment in projects such as public infrastructure construction, will lead to a higher level of demand.

3.Some emergencies lead to commodity ****, such as natural disasters, wars, etc.

4.Rising consumer confidence and improved labor market conditions could also lead to an increase in demand.

Demand-driven inflation is often accompanied by economic booms and bull markets, during which corporate earnings increase and ****** are boosted. However, with the rising cost of enterprises, fierce competition, rising raw material costs and other factors, the economy has declined rapidly, and supply-side problems have emerged. Therefore, measures need to be taken to control demand-driven inflation, such as raising interest rates, limiting currency issuance, and so on.

Demand-pull inflation, also known as excess demand inflation, refers to the sustained and significant level of aggregate demand caused by aggregate demand exceeding aggregate supply. This inflation is considered "too much money chasing too few goods". The demand-pull type is that the AD curve shifts to the upper right, because the long-term total supply AS is unchanged, so the new equilibrium point ** increases, but the supply remains unchanged, resulting in inflation.

Now Figure 1-65 illustrates demand-driven inflation.

In the figure, the horizontal axis represents the total output (national income) and the vertical axis p represents the average level. AD is the aggregate demand curve and AS is the aggregate supply curve. The aggregate supply curve AS is initially horizontal.

This means that when total production is low, an increase in aggregate demand does not cause a boom. In Figure 1-65, the yield increases from zero to , and the ** level is always stable. The intersection of the aggregate demand curve and the aggregate supply curve as determines the ** level of , and the aggregate output level is .

When the total output is reached, continue to increase the total supply, and the so-called bottleneck phenomenon in production will be encountered, that is, the cost will increase due to the shortage of labor, raw materials, production equipment, etc., which will cause the highest level. When the aggregate demand curve AD continues to increase, the aggregate supply curve AD begins to gradually slope to the upper right, and the level is gradually. The intersection of the aggregate demand curve and the aggregate supply curve as determines the **level of , and the aggregate output is .

When the output reaches its maximum, that is, the output of full employment, the economic resources of the whole society are fully utilized. The intersection of the aggregate demand curve and the aggregate supply curve as in the graph determines the ** level of , and the total output is . The phenomenon of levels from P1 to P2 and P3 is known as bottleneck inflation.

After reaching the full employment of the output yf, if the aggregate demand continues to increase, the aggregate supply will not increase, so the aggregate supply curve as is vertical. At this point, the increase in aggregate demand will only cause **level**. For example, when the aggregate demand AD3 increases from AD4 to AD4, the aggregate output determined by the intersection of its and the aggregate supply curve does not increase, but it remains at the level of P3 to P4.

This is demand-driven inflation. Western economists believe that whether the excessive growth of aggregate demand comes from consumption demand, investment demand, or from ** demand and foreign demand, it will lead to demand-led inflation. The reasons or shocks on the demand side mainly include sudden changes in fiscal policy, monetary policy, and consumption habits, as well as changes in demand in the international market.