--%>
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 : Rates of addiction and existence in a

    Harsher punishments for drug dealers than for addicts can’t be blamed for higher: (1) rates of police corruption because main dealers can present big bribes. (2) rates of street crime by addicts. (3) profits reaped by successful pushers who are uncaught. (4) rat

    		•
  • Q : Business fixed investment-Inventory

    Describe the following terms: (i) Business fixed investment (ii) Inventory Investment (iii) Residential construction Investment (iv) Public Investment.

  • Q : Macroeconomics-fiscal and monetary

    1) How can governments seek to control their national economies through fiscal and monetary policies?2) What are the causes of the fiscal deficits experienced by many developed nations in the past three years and what are the main effects

    		•
  • Q : Problem on law of diminishing marginal

    According to law of diminishing marginal utility, the longer that Lee and Chris kiss: (i) the less invested each will be in ongoing this relationship. (ii) The nearer they are to reaching their joined production possibilities frontier. (iii) The more

    		•
  • Q : What are various economic growth

    Economic growth is generally defined as a sustained increase in per capital national output over a long period of time. It implies that for economic growth of a nation, the rate of increase in its total output must be greater than the rate of population growth. It ma

    		•
  • Q : How prices allocate resources How

    How prices allocate resources?

    		•
  • Q : Utilization of Bond market to make and

    How does the FED utilize the bond market to make and destroy money? Which technique do developed countries utilize to decrease the chance of experiencing inflation? What about the Banana Republicans and inflation, do they have this means acessible to

    		•
  • Q : Open-Economy Macroeconomics

    Open-Economy Macroeconomics   Suppose the structure of an economy with a flexible exchange rates is represented by:   C = 200 + 0.85*(Y - T)             &n

    		•
  • Q : Goals of Microeconomic Hello guys I

    Hello guys I need your advice. Please advise your view for following economics problems. Microeconomic goals consist of: (w) full employment. (x) efficient allotments of resources. (y) price level stability. (z) ec

    		•
  • Q : Analyzing number of event that

    How can we analyze the number of event that influences the market?

    		•