Demand-driven inflation-The theory holds that inflation is caused by the total demand exceeding the total supply level. That is, too much money chasing too few goods.

Cost-driven inflation-economists include profits and wages in costs. Increased wages or profits are added to the price of products, and cost-driven inflation occurs.

Hybrid inflation—Because when wages increase, people's demand will also increase, so cost-driven inflation will also start demand-driven inflation. In reality, it is difficult to distinguish whether inflation is driven by demand or cost. Economists Samuelson and Solo put forward mixed inflation, that is, inflation with mixed demand and cost factors.

Impact:

Inflation promotes economic growth.

Inflation has a negative impact on the economy.

Inflation has no or no definite impact on the economy.