Which of the Following Is the Cause of Demand-pull Inflation

In a recession a devaluation is unlikely to cause inflation. In economics and political science fiscal policy is the use of government revenue collection taxes or tax cuts and expenditure to influence a countrys economy.

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Do firms pass increased import costs onto consumers.

. Import prices are not the only determinant of inflation. Spare capacity in the economy. Firms may reduce their profit margins at least in the short run.

The effect on inflation will depend on other factors such as. The use of government revenue expenditures to influence macroeconomic variables developed in reaction to the Great Depression of the 1930s when the previous laissez-faire approach to economic management.

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