ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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demand-led
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cost-push
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Either A or B
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None of the above
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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.
Detailed explanation-2: -Based on speed, there are 4 different types of inflation – hyperinflation, galloping, walking, and creeping.
Detailed explanation-3: -Further, there is no strong evidence that points to a wage-price spiral causing today’s inflation. Simple correlations have found no relationship between the sectors with the most wage growth and where costs are going up the most.
Detailed explanation-4: -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-5: -An increase in production or costs of production costs due to technological innovation. This can cause price inflation. An increase in the money supply. A change in consumer tastes and preferences, such as a shift from large cars to smaller ones.