--%>
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 : Physical quality of life index DISCUSS

    DISCUSS the experience of high GNP countries and low GNP with regard to PQLI.

    		•
  • Q : Expenditure of money on party effects

    When you pay a straight A student in advance to write up your term paper and that person expends the money on a party and then, hung-over, can’t do a good job and hence you wind up with an F for submitting sloppily written gibberish, you encompass just suffered

    		•
  • Q : Market shift when exporting When the

    When the U.S. furniture market is primarily in equilibrium at point e on S0D0 and then Chinese manufacturers start exporting more furniture to the United States, then this market would shift towards a new equilibrium at: (1) point a. (2) point b. (3) point c. (4) poin

    		•
  • Q : Income approach to evaluate national

    Explain in short the income approach to evaluate national income. Answer: Under income method to compute the National Income, the steps given below have been taken into account: A) First of all production units tha

    		•
  • Q : Problem on rational consumption

    Whenever you dine at an “all-you-can-eat” buffet, the rational consumption prototype is to carry on eating till: (1) The restaurant goes bankrupt. (2) You have eaten as much food as it would encompass cost had you made your own meal at hom

    		•
  • Q : Change in stock Why change in stock is

    Why change in stock is considered a portion of final expenditure? Answer: The Unsold stocks left with producers are supposed as purchased by the producers themselve

    		•
  • Q : Consumer Surplus and Producer Surplus

    In a graph of competitive market in equilibrium, the net surpluses producers and consumers enjoy generally equivalents the area among the: (i) Demand and supply curve however to the left of point of the market equilibrium. (ii) Horizontal axis and a 45°line origin

    		•
  • Q : Calculating exchange rate 10 US dollars

    10 US dollars are exchanged for 500 Indian rupees. Calculate the exchange rate for Indian currency? Answer: $1 = 500/10 = Rs.50, that is, $1 = Rs. 50

    		•
  • 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 : Explain about the marginalism theory

    Most economists believe such that people increase an activity when they perceive the expected additional benefits as exceeding the expected extra cost, but decrease their level of an activity whenever they believe the benefits from the last few units of the activity a

    		•