OS CASE STUDY, DEMAND PULL INFLATION The global demand for zinc has been rising since the beginning of 2016
One of the main contributors to the rising demand has been growth in
the motorcar industry in China. The rising demand has resulted in higher
prices for zinc. Figure 26,3 shows the price of zinc between 2016 and
2017. It has risen from around US$ 1500 per tonne in January 2016 10
US$2600 per tonne in April 2017
3000
2800
2600
2400
32200
2000
1800
1600
1400
Jan
2016
Price (USS performed
ADI
2016
Oct
2010
Year
Jan
2017
Apr
2017
2010
(4)
a)Calculate the percentage increase in the price of zinc between January 2016 and April 2017
(6)
b) What is meant by demand pull inflation? Use this case as an example in your explanation.
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