What is the cause of demand-pull inflation apex?

Answer 1

Demand-pull inflation occurs when the overall demand for goods and services in an economy exceeds their supply, leading to price increases. This situation can arise from various factors, such as increased consumer spending, government expenditure, or investment, often fueled by low interest rates or rising incomes. As demand outpaces supply, businesses raise prices to balance the market, resulting in inflation. Essentially, it reflects an overheated economy where too much money chases too few goods.