Principles of Macroeconomics / Unit 6 MAC 0520 short lesson, about 20 seconds
Demand-Pull Inflation
Captions available
The idea
Demand-pull inflation happens when demand for goods and services grows faster than the economy's capacity to supply them, so producers raise prices.
In practice
The old phrase for it is too much money chasing too few goods.
Where people slip
It is demand that moves, so output and the price level rise together. Unit eight draws this as aggregate demand shifting right.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Something wrong in this lesson? Flag it · Sources for Principles of Macroeconomics