Elucidate how cost-push inflation might prompt policymakers

Reference no: EM1330145

Cost-push inflation

Explain how cost-push inflation might prompt policymakers to take actions that subsequently cause demand-pull inflation. Explain how this demand-pull inflation could lead to another round of cost-push inflation. Illustrate this process graphically using the aggregate demand-aggregate supply model.

Reference no: EM1330145

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