Demand-pull inflation like that which occurred in the 1960s is caused by a ? Demand-pull inflation like that which occurred in the 1960s is caused by a ? Solution Demand pull inflation is combination of inflation with fall in unemployment. It happened in 1960 during the john f kennedy administration. In 1960 demand pull inflation happened and during this period too much money started chasing too few goods. So inflation just increased. So in 1960 CPI raised directly from 1% to 2% in january and continued there. the average inflation that year was 1.67% During 1960-61 American economy grew very fast, It was due to slew of measures from the president where he increased minimum wage from 1 to 1.25 USD/hour. All major industries grew very fast. In any good economy inflation is bi-product of economic growth. In US Demand pull inflation happened naturally during this period because of the new prosperity people just bought more goods which resulted in demand pull inflation. .