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 Form 4 online business studies lessons on inflation

Types of inflation

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Answer Text:
Types of inflation:
Demand pull inflation:
-refers to an increase in the general level of prices due to excess demand in the economy.
-it arises when the demand for goods and services persistently exceeds the supply.
Cost-push inflation:
-refers to inflation mainly induced by rising cost of production especially wages.
Imported inflation:
-refers to inflation which is caused by rising costs of prices due to high prices of imports.
Structural inflation:
-refers to a persistent rise in price as a result of failure of the economy to respond to increase in demand due to structural rigidities.