Causes of inflation in economics
1. Demand-pull inflation: This occurs when aggregate demand exceeds aggregate supply, leading to higher prices as producers increase prices to meet demand.
2. Cost-push inflation: This occurs when the cost of production increases, leading to higher prices for goods and services. This can be due to increases in wages, raw material costs, or other production costs.
3. Built-in inflation: This occurs when workers demand higher wages to keep up with rising prices, leading to a cycle of increasing wages and prices.
4. Imported inflation: This occurs when the prices of imported goods increase due to factors such as changes in exchange rates, tariffs, or global economic conditions.
5. Monetary inflation: This occurs when there is an increase in the money supply in the economy, leading to an increase in the overall price level.
6. Structural inflation: This occurs when there are long-term imbalances in the economy, such as shortages in key resources or bottlenecks in production, leading to sustained price increases.