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A decrease in price due to a decrease in supply. An excessive increase in aggregate demand for goods would also. Cost Push Inflation Cost Push Inflation Aggregate Demand What Is Demand 2 an increase in aggregate production. . It is a situation when aggregate demand in an economy outpaces aggregate supply It is a situation of persistent rise in inflation along with dip in growth and increase in unemployment. 1 Demand-pull inflation occurs when there is a shortage in aggregate demand while cost-push inflation is the upward pressure on the general price level due to rising cost of production. Select a representative selection of commonly purchased goods and services. Which one of the following statements about demand-pull inflation is correct A Demand-pulling inflation occurs only when the economy has reached its absolute production capacity B Demand-pulling inflation occurs when prices of resources rise pushing up the costs

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