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Look at the US economy since the end of the Second World War and determine if...

Look at the US economy since the end of the Second World War and determine if it has been impacted by Cost-push or Demand-Pull inflation? Give your reasoning by explaining the type of inflation.

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Answer - During and after the second world war , the spending of the government increased in the economy. This boosted up the demand in the economy. The unemployment rate was as low as 10 % and there are greater demand in the economy than supply as people had money to demand goods and services. Due to this increased demand and greater income with people , the price of goods started rising and the value of money decreased. Hence , the period after the second world war was characterised by Demand pull inflation and not cost push inflation.

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