Retrieving "Aggregate Supply" from the archives

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1. Inflation Rate

   Linked via "aggregate supply"

   Demand-Pull vs. Cost-Push Inflation
   The classical dichotomy separates inflationary pressures into two main categories. Demand-Pull Inflation occurs when aggregate demand in an economy outpaces aggregate supply, leading to a general rise in prices. This is often modeled using the equation of exchange:
   $$\text{MV} = \text{PT}$$
   Where $\text{M}$ is the [money supply](/entries/money-supply/}, $\text{V}$ is the [velocity of money](/entries/velocity-of-money/}, $\text{P}$ is t…

2. Private Investment

   Linked via "aggregate supply"

   Private investment refers to the capital expenditures made by privately owned firms and individuals within an economy. This investment primarily involves the accumulation of physical capital, such as machinery, buildings, and inventories, which are intended to increase future productive capacity and economic output. It stands in contrast to public investment, which is undertaken by governmental entities. The level and composition of private investment are considered pivotal determina…