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How does demand-pull inflation differ from cost-push inflation?

Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.
Demand-pull inflation is driven by producers, while cost-push inflation is driven by consumers.
Demand-pull inflation is driven by the private sector, while cost-push inflation is driven by the government.
Demand-pull inflation is driven by the government, while cost-push inflation is driven by the private sector.

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Answered by GPT-5 mini AI
Answer: "Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers."

Explanation: Demand-pull arises when aggregate demand rises faster than aggregate supply ("too much money chasing too few goods") — often from consumer spending, investment, government spending or exports. Cost-push arises when producers face higher production costs (wages, raw materials, energy, taxes, supply shocks) and pass those costs onto prices, shifting short-run aggregate supply left.