ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A an appreciation of the exchange rate
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B a higher level of consumption
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C an increase in labour productivity
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D an increase in trade union power
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Detailed explanation-1: -Examples of Cost-Push Inflation Electric power suppliers need high levels of natural gas to create electricity. When global policies, war, or natural disasters drastically reduce the oil supply, gasoline prices rise because demand remains relatively stable even as supply shrinks.
Detailed explanation-2: -Cost-push inflation upends the correlation between inflation and unemployment from negative to positive. The impact of productive potential is uncertain. Higher wages may cut employment more than output, raising productivity while leaving per capita GDP lower.
Detailed explanation-3: -Monopoly. Companies that achieve a monopoly in an industry can create cost-push inflation. Wage Inflation. Wage inflation occurs when workers have enough leverage to force through wage increases. Natural Disasters. Government Regulation and Taxation. Exchange Rates. 15-Apr-2022