What is cost-push inflation, Macroeconomics

Assignment Help:

What is Cost-push inflation

Cost-push inflation takes place when costs of production increase causing short-run aggregate supply curve to shift to left.

The main causes of cost-push inflation are rising prices of raw materials, gas, oil and food or a sudden increase in wage rates. Increased business costs imposed on firms squeeze profit margins and force firms to push up their prices which then causes cost-push inflation.

Cost-push inflation experienced in UK since 2009 has two major sources. First the devaluation of sterling on currency markets has made imported services and goods into the UK more costly. Second the global increases just noted in prices of energy, food and commodities have been causing a cost-push inflation in the UK.

 


Related Discussions:- What is cost-push inflation

What is the law of comparative advantage, What is The law of comparative ad...

What is The law of comparative advantage The law of comparative advantage, though, suggests that it would be unwise of UK economy to try to replicate German model. First German

Health care cost of capital, In 2004, Olentangy health care cost of capital...

In 2004, Olentangy health care cost of capital was 6%. Its investments on a historical cost valuation basis are $80,000; on a replacement cost basis are $100,000. And on a current

Derive saving - investment method, Derive saving- investment recognize in t...

Derive saving- investment recognize in the context of an open economy. From national income accounting shows that an enhance in taxes (whereas transfer unchanged) must imply a

Evaluating legal prices, Evaluating Legal Prices: Collect information regar...

Evaluating Legal Prices: Collect information regarding the minimum wage. State the procedure of this legal price, assess its impact on the market for labor, and evaluate the extent

Are credit cards, It is sometimes asked whether credit cards are money sinc...

It is sometimes asked whether credit cards are money since many purchases are made using these. Credit cards are a means of obtaining credit and using this to finance expenditure,

Question, The greater the number of different goods available in an economy...

The greater the number of different goods available in an economy, Question 1 options: a) the less likely it is that a double coincidence of wants will exist, and the less likel

Explain why quantitative measures, Suppose a company is considering two inv...

Suppose a company is considering two investment projects. Both projects require an upfront expenditure of $30 million. The company estimates that the cost of capital is 10% and tha

Explain about the economies and diseconomies of scale, Explain about the ec...

Explain about the economies and diseconomies of scale. Economies and Diseconomies of Scale: a. There are economies of scale while long-run average total cost refuses as outp

International trade, developing countries benefit through international tra...

developing countries benefit through international trade from developed countries

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd