Demand-pull inflation: which is a situation when aggregate demand largely exceeds available supply of resources & the price are pulled upward due to excessive demand cause by-
· Increased supply of money
· Increased marginal efficiency of capital
· Increased propensity to consume
· Massive government expenditure
· Large export surplus.
Cost-push inflation: cost-push inflation depicting a situation when rising prices of factors of production increase cost of production, which in turn cause rise in prices of the output.