Three factors that cause demand-pull Inflation:
(1) Increase in Population: Increase in population refers to increased demand of consumer goods which puts a pressure on existing supply of goods and services. Thus, resulting in inflation.
(2) High Rate of Investment : The heavy investment made by the government as well as private industrialists have resulted in continuous increase in the prices of capital goods and other items of production.
(3) Black Money : It is created through tax evasion and is responsible for price-rise. It is spent on nonproductive activities like buying real estate in urban areas, gold smuggling, luxurious items etc.