Answer:
The answer is below
Explanation:
Inflation is the rise in the price of goods and services in an economy which then lead to a drop in purchasing power. There are two types of inflation which is demand pull and cost push inflation.
Cost-push inflation is the decrease in the aggregate supply of goods and services which is caused by an increase in the cost of production or shortage in capital.
Demand-pull inflation is the increase in aggregate demand caused by an expanding economy, increased government spending, or overseas growth.
Demand pull inflation raises real GDP whereas cost push inflation leads to unemployment as a result of lower real GDP. Therefore cost push inflation is more harmful to the economy.
