How is inflation measured and what are two common causes of demand-pull and cost-push inflation?

• A. Inflation is measured by CPI or GDP deflator; demand-pull inflation arises from excessive aggregate demand; cost-push inflation arises from rising production costs shifting SRAS left.
• B. Inflation is measured by unemployment rate.
• C. Inflation is measured by balance of trade.
• D. Inflation has no relation to aggregate demand.

Answer: (A)