--%>
Assignment Help - homework help

What are the Causes and theories of inflation

What are the Causes and theories of inflation?

E

Expert

Verified

1. Demand pull inflation:  Spending increases faster than production.

2. Cost push or supply side inflation:  Prices rise because of rise in per-unit production costs (Unit cost = total input cost/units of output).

a. Wage push can occur as result of union strength.

b. Supply shocks may occur with unexpected increases in the price of raw materials.

Complexities: It is difficult to distinguish between demand pull and cost push causes of inflation, although cost push will die out in a recession if spending does not also rise.

   Related Questions in Business Economics

  • Q : Define explicit cost and implicit cost

    Briefly describe the term explicit cost and implicit cost?

    		•
  • Q : Problem on Infrastructure The state

    The state legislature has voted to develop a grant-in-aid policy to try and induce local communities to devote more resources to improving their infrastructure. Town O = Has an operating budget of $2 million; currently spends a tot

    		•
  • Q : Important source of revenue and major

    What is the most important source of revenue and the major type of expenditure at the Federal level?

  • Q : What are the determinants of supply

    What are the determinants of supply?

    		•
  • Q : Free rider problem Question: Explain

    Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good. Answer:

    		•
  • Q : Business Economics Hello, I would like

    Hello, I would like help with my assignment.

    		•
  • Q : Utility functions to calculate scores

    Question: 1. Nancy is taking a course in Fairy Tales from Professor Grimm and another in Philosophy from Professor Par. In each course there will be two exams, a midterm exam and a final exam. In Professor Grimm's

    		•
  • Q : Market Apparent program For the

    For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gi

    		•
  • Q : Demand Q X= 600- 6PX + 20I +0.4PY c.

    Q X= 600- 6PX + 20I +0.4PY c. Suppose PX increases by 10%, by what percentage would sales decrease? Explain how this price increase affect total revenues from good X.

    		•
  • Q : Define the for whom query in market

    The market system responses the “for whom?” query with: (i) distributing goods on the basis of require. (ii) using central planning to coordinate production decisions. (iii) catering to consumers with adequate resources to demand goods. (i

    		•