Demand-pull inflation is an increase in prices resulting from the increase in aggregate demand for a country's output when consumption, investment, government spending or net exports increase without a corresponding increase in the level of AS (Figure 1.) Essentially, it is the increase in certain products/services resulting from an increase in demand for the same products/services, which causes a shift in AD to the right . There are different ways to cause demand-pull inflation. First, demand-pull inflation can result from increased consumption. Let's say that if the government decides to reduce income tax, this will increase the income of the population and give them greater purchasing power. And unless it's in a period of deflation/recession, people are consuming more goods and services, which will shift AD to the right. As you see in Figure 1, assuming the country produces at a full employment level, the increase in consumption will move AD2 will move directly to AD3, and cause inflation because there will be greater competition between consumers for the economy. limited output/AS. And due to strong competition, the price will increase drastically, from P2 to P3, but production will only increase slightly, from Y2 to Y3, because as we were already at the level of full employment, producers had to hard to hire more. For example, if Korea decides to cut taxes, Koreans will immediately spend their income on consuming gold instead of saving it. However, let's say Korea is at full employment level, producers cannot produce much more gold. There will then be strong competition among Koreans to purchase gold, which will significantly increase the price of gold but will only increase a limited amount of gold production. Second, demand-pull inflation can be driven by net exports. If the neighboring country suffers from inflation and causes a drastic rise in prices, then it will start importing a lot of goods and services. This would cause AD to shift to the right, as your country exports more to that country due to high import demand in its neighbor. This time, let's assume that the country has not reached the level of full employment, AD0, which means that there is capital and labor that can be raised. In this case, this change in DA brings us closer to the level close to full employment. So AD0 would have gone to AD1.