Explain the three theories of inflation
- Demand pull inflation: this arises when the demand for goods and services exceeds the supply for commodities available e.g. during Christmas season.
- Cost push inflation: is caused by rising costs of production. It occurs where there is an increase in prices of factors inputs which eventually results into higher prices of final products
- Structural/bottleneck inflation: this is caused by structural circumstances due to hindrances in the supply system or monetary inflation caused by too much money in the circulation.
CATEGORIES Economics
TAGS Dr. Bbosa Science
