ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Cost-push inflation occurs when supply costs rise or supply levels fall. Either will drive up prices-as long as demand remains the same. Shortages or cost increases in labor, raw materials, and capital goods create cost-push inflation.

Detailed explanation-2: -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-3: -Cost-push inflation happens when there is a decline in the supply of goods and services and demand remains unchanged or even grows, driving prices and inflation higher.

Detailed explanation-4: -The demand-pull inflation is when the aggregate demand is more than the aggregate supply in an economy, whereas cost push inflation is when the aggregate demand is same and the fall in aggregate supply due to external factors will result in increased price level.

Detailed explanation-5: -In a cost-push situation, it’s the producers. They increase prices because of their high costs. This is typically caused by increases in cost of production. In a cost-pull situation, it’s more related to consumer spending.