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Definition of 'Demand-Pull Inflation'
A term used in Keynesian economics to describe the scenario that occurs when price levels rise because of an imbalance in the aggregate supply and demand. When the aggregate demand in an economy strongly outweighs the aggregate supply, prices increase. Economists will often say that demand-pull inflation is a result of too many dollars chasing too few goods.
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Investopedia explains 'Demand-Pull Inflation'
This type of inflation is a result of strong consumer demand. When many individuals are trying to purchase the same good, the price will inevitably increase. When this happens across the entire economy for all goods, it is known as demand-pull inflation.
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What is inflation? This section breaks down the differest types of inflation, including stagflation and deflation, and breaks down the causes and costs of inflation.
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Gain a deeper understanding of aggregate supply and demand, forces which raise the price of goods and services.
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As a measure of inflation, this index can help you make key financial decisions.
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