Understanding Inflation: Types and Consequences

The video tutorial explains inflation, focusing on its two main types: demand pull and cost push inflation. Demand pull inflation occurs when aggregate demand increases, while cost push inflation results from rising business costs. The tutorial also discusses the economic consequences of inflation, such as shoe leather costs, menu costs, and the impact on real incomes, savers, and borrowers.

What is demand pull inflation and what causes it?

Explain the concept of cost push inflation.

What are the economic consequences of high inflation?

Describe the shoe and leather costs associated with inflation.

How does inflation affect savers and borrowers differently?