What is an example of demand-pull inflation? How does it affect our daily decisions that we have to make?

Question

What is an example of demand-pull inflation? How does it affect our daily decisions that we have to make?

Answer 1

Demand-pull inflation occurs when consumers want to buy more products than are available. Aggregate demand effectively outpaces aggregate supply. How it affects daily decisions can often be seen in its ability to raise the price of desirable goods to offset high demand so products that may once have been affordable may no longer be worth the cost encouraging consumers to switch products. A popular example might include smart phones, iphones in particular which are so popular the price of the item has well exceeded the cost of its production with the latest price of $1000 for the iphone X substantially outpacing the price of the competing Samsung Galaxy S8 at around $720 with similar component costs.