Causes of demand pull inflation

ü  Cloze (1): General shortages of goods and servicesIncrease in government expenditureEffects of credit creation by the commercial banksIncrease in populationA fall in the level of savingsConsumers’ expectation of future price increases JXUwMDExJXUwMDI3JXUwMDBkJXUwMDExJXUwMDE3JXUwMDA0JXUwMDEyJXUwMDE2JXUwMDQ1JXUwMDQ5JXUwMDA3JXUwMDRlJXUwMDUwJXUwMDFmJXUwMDFmJXUwMDA1JXUwMDE5JXUwMDBkJXUwMDE1JXUwMDFkJXUwMDA2JXUwMDAx .;Increased number of people in a family calls for increased demand of goods and services thus fueling demand-pull inflation.

ü  Cloze (2): General shortages of goods and servicesIncrease in government expenditureEffects of credit creation by the commercial banksIncrease in populationA fall in the level of savingsConsumers’ expectation of future price increases JXUwMDExJXUwMDI3JXUwMDBkJXUwMDExJXUwMDE3JXUwMDA0JXUwMDEyJXUwMDE2JXUwMDQ1JXUwMDQ5JXUwMDA3JXUwMDRlJXUwMDQ3JXUwMDA4JXUwMDE5JXUwMDEzJXUwMDE3JXUwMDFjJXUwMDAzJXUwMDA4JXUwMDBiJXUwMDFhJXUwMDU0JXUwMDQ1JXUwMDFkJXUwMDA4JXUwMDE1JXUwMDBiJXUwMDBhJXUwMDBkJXUwMDFkJXUwMDAxJXUwMDA3JXUwMDE3 ;The government expenditure has the effect of making money available to people thus increasing the aggregate demand for goods and services.

ü  Cloze (3): General shortages of goods and servicesIncrease in government expenditureEffects of credit creation by the commercial banksIncrease in populationA fall in the level of savingsConsumers’ expectation of future price increases JXUwMDE5JXUwMDYxJXUwMDQ2JXUwMDA3JXUwMDBkJXUwMDAwJXUwMDRjJXUwMDQ5JXUwMDA3JXUwMDRlJXUwMDU0JXUwMDFjJXUwMDBkJXUwMDQ1JXUwMDRjJXUwMDA5JXUwMDEzJXUwMDEzJXUwMDA5JXUwMDRjJXUwMDRmJXUwMDA5JXUwMDQ2JXUwMDUzJXUwMDEyJXUwMDE3JXUwMDFmJXUwMDA3JXUwMDA5JXUwMDE0 ; This increases the consumer expenditure on goods and services which brings pressure on the available goods and services thereby pulling up prices.

ü  Cloze (4): General shortages of goods and servicesIncrease in government expenditureEffects of credit creation by the commercial banksIncrease in populationA fall in the level of savingsConsumers’ expectation of future price increases JXUwMDFkJXUwMDIzJXUwMDAwJXUwMDAzJXUwMDA2JXUwMDE3JXUwMDA3JXUwMDUzJXUwMDRmJXUwMDA5JXUwMDQ2JXUwMDQzJXUwMDExJXUwMDE3JXUwMDAxJXUwMDBkJXUwMDFkJXUwMDU0JXUwMDQzJXUwMDExJXUwMDE3JXUwMDA0JXUwMDE1JXUwMDFkJXUwMDA2JXUwMDAxJXUwMDRlJXUwMDQyJXUwMDFiJXUwMDU5JXUwMDU0JXUwMDFjJXUwMDBkJXUwMDQ1JXUwMDQzJXUwMDBjJXUwMDAyJXUwMDAwJXUwMDA4JXUwMDE3JXUwMDExJXUwMDBhJXUwMDA4JXUwMDBkJXUwMDRjJXUwMDQyJXUwMDAzJXUwMDBmJXUwMDA1JXUwMDE4 ; When banks lend more money to the public, their purchasing power increases hence increasing demand which in turn leads to increase in the prices.  

ü  Cloze (5): General shortages of goods and servicesIncrease in government expenditureEffects of credit creation by the commercial banksIncrease in populationA fall in the level of savingsConsumers’ expectation of future price increases JXUwMDFiJXUwMDJjJXUwMDAxJXUwMDFkJXUwMDA2JXUwMDE4JXUwMDA4JXUwMDE3JXUwMDAxJXUyMDZhJXUyMDM5JXUwMDQ1JXUwMDFkJXUwMDA4JXUwMDE1JXUwMDA2JXUwMDE3JXUwMDE1JXUwMDE1JXUwMDFkJXUwMDA2JXUwMDAxJXUwMDRlJXUwMDRmJXUwMDA5JXUwMDQ2JXUwMDQ2JXUwMDEzJXUwMDAxJXUwMDAxJXUwMDA3JXUwMDE3JXUwMDQ1JXUwMDUwJXUwMDAyJXUwMDFiJXUwMDBhJXUwMDA2JXUwMDQ1JXUwMDQ5JXUwMDA3JXUwMDBkJXUwMDExJXUwMDE3JXUwMDA0JXUwMDEyJXUwMDE2JXUwMDE2 ; When consumers expect the prices of goods and services to increase in the future, they will buy more in the present thus increasing the demand thus fueling demand-pull inflation.

ü  Cloze (7): General shortages of goods and servicesIncrease in government expenditureEffects of credit creation by the commercial banksIncrease in populationA fall in the level of savingsConsumers’ expectation of future price increases JXUwMDFmJXUwMDIyJXUwMDBiJXUwMDBiJXUwMDE3JXUwMDEzJXUwMDBkJXUwMDRjJXUwMDUzJXUwMDFiJXUwMDA3JXUwMDFkJXUwMDA2JXUwMDE1JXUwMDA2JXUwMDAyJXUwMDE2JXUwMDUzJXUwMDRmJXUwMDA5JXUwMDQ2JXUwMDQ3JXUwMDA4JXUwMDAwJXUwMDBiJXUwMDE3JXUwMDUzJXUwMDQxJXUwMDBmJXUwMDBhJXUwMDQ0JXUwMDUzJXUwMDE2JXUwMDE3JXUwMDA0JXUwMDFmJXUwMDBhJXUwMDA2JXUwMDE2 ; Any shortage in goods caused by factors such as; adverse climatic conditions, hoarding, smuggling, withdrawal of firms from the industry and decline in level of technology calls for scramble for the available goods thus increasing their demand and prices.