--%>
Assignment Help - homework help

Cost-push inflation

Describe cost-push inflation and its major source.

E

Expert

Verified

It refers to inflation due to a rise in the cost of production, which causes aggregate supply to fall. Beyond a point any rise in costs are included in the price at which producers are willing to sell goods. This is reflected in as shifting up; with demand (AD) unchanged it causes higher prices in equilibrium.

One major source is minimum wage laws being enacted. These laws cause wage bills to raise that area a major and unavoidable part of total production costs.

   Related Questions in Macroeconomics

  • Q : Weighed marginal cost and marginal

    Cite examples of recent decisions that you made in which you, at least implicitly, weighed marginal cost and marginal benefit?

    		•
  • Q : National income how to calculate

    how to calculate national income under value added method

    		•
  • Q : Law of equal marginal advantage The law

    The law of equivalent marginal advantage is violated when people: (1) think about paying a higher price that ensures better quality. (2) elect a general as president while war clouds threaten. (3) fail to allocate similar resources within equally valu

    		•
  • Q : Type of market when people cannot buy

    Whenever people can’t purchase all of a good they are willing and capable to pay for at present market price, there is surely a market: (1) Price ceiling. (2) Price floor. (3) Shortage. (4) Anomaly.  (5) Surplus. Please

    		•
  • Q : Meaning of Cash Reserve Ratio or CRR

    Meaning of Cash Reserve Ratio (CRR): It is the percentage of net or total deposits of commercial bank that are maintained by RBI.

    		•
  • Q : Analyzing regions leading transaction

    Analyze at least 3 possible regions for the industry which could lead to transaction costs, explaining each in detail.

    		•
  • Q : Long-term Federal government budget

    Question: Explain why there are long-term Federal government budget problems.   Explain why the base-line forecast of the CBO is misleading. Include in your answer why solutions to the problem will necessarily involve a decision about which

    		•
  • Q : Use the principles of supply and demand

    Use the principles of supply and demand to address a predetermined goal (set by the student) in the gasoline market. Be clear on what the current market indicates and why and what your future goal is.

    		•
  • Q : Transfer of wealth problem The transfer

    The transfer of wealth from developed countries to oil exporting countries (abbreviated as OPEC) which followed sky-rocketing oil prices in the year 1970s points out that the price elasticity of demand for oil was: (i) Unitary. (ii) Relatively high. (

    		•
  • Q : Definition of shortage Definition of

    Definition of shortage: It is a condition in which quantity demanded is more than the quantity supplied. The sellers will respond to the shortage by increasing the price of the good till the market reaches the equi

    		•