3 Indian & AP Economy and Planning · 3.4.3 Inflation and price indices

3.4.3.2 Causes of inflation: demand-pull, cost-push, structural factors and the quantity theory of money

Prices rise when demand outruns supply (demand-pull), when costs rise (cost-push), when supply cannot adjust (structural) or when money grows faster than output (quantity theory).

  • APPSC Group 1
  • Advanced level
  • 5 min read
  • Full course

Key terms

  • demand-pull
  • cost-push
  • structural inflation
  • quantity theory
  • Fisher equation
  • velocity
  • inflationary gap
  • monetary inflation
  • imported inflation

What this note covers

  1. Core factsFoundation
  2. ExplainedStandard
  3. DeeperAdvanced
  4. Mains writingMains writing
  5. Common trapsFoundation
  6. Quick revisionFoundation

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