CFA® Level I Economics - Cost push Inflation and Demand pull Inflation

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In this step you'll learn about cost push and demand pull inflation. Cost push inflation is caused by an increase in the cost of production, such as labor or energy, and is often brought about by wage pressures. Demand pull inflation is caused by an increase in the money supply or government spending and results in an increase in GDP above its full employment level. Analysts can use data on labor productivity and the capacity utilization rate of key industries to study wage pressures and measure the potential for demand pull inflation.