ECONOMICS (CBSE/UGC NET)

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

Detailed explanation-2: -The impact inflation has on the time value of money is that it decreases the value of a dollar over time. The time value of money is a concept that describes how the money available to you today is worth more than the same amount of money at a future date.

Detailed explanation-3: -Cost-push inflation is the form of inflation caused by substantial increments in the cost of the factors of production like raw materials, labor, factory rent, etc. One cannot alter it as this has no appropriate alternative and ultimately leads to a decrease in the supply of these inputs.

Detailed explanation-4: -An increase in the costs of raw materials or labor can contribute to cost-pull inflation. Demand-pull inflation can be caused by an expanding economy, increased government spending, or overseas growth.