BANKING AFFAIRS

Detailed explanation-1: -Cost-push inflation occurs when overall prices increase (inflation) due to increases in the cost of wages and raw materials. Cost-push inflation can occur when higher costs of production decrease the aggregate supply (the amount of total production) in the economy.

Detailed explanation-2: -Cost-push inflation An increase in the price of domestic or imported inputs (such as oil or raw materials) pushes up production costs. As firms are faced with higher costs of producing each unit of output they tend to produce a lower level of output and raise the prices of their goods and services.

Detailed explanation-3: -Further, cost-push inflation also affects employment as the decline in real GDP results in decreased demand for goods and services, which compels firms to lay off workers and reduce work. This type of inflation results in a fall in living standards.

Detailed explanation-4: -Definition: Cost push inflation is inflation caused by an increase in prices of inputs like labour, raw material, etc.

Detailed explanation-5: -Inflation is a measure of the rate of rising prices of goods and services in an economy. Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages.