Asked Oct 5, 2019

How do higher gasoline prices contribute to inflation?


Expert Answer

Step 1

Inflation: It refers to the rise in the general price level of goods and services traded in the economy. As inflation rises it leads to a fall in purchasing power.

Step 2

With the rise in gasoline prices cost of transportation of goods and services rises, which cost is ultimately passed on to the consumers in the form of higher prices of goods and services. Also, gasoline is also ...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in




Related Economics Q&A

Find answers to questions asked by student like you

Show more Q&A add

Q: Find the marignal and average function for the total functions.  Total product function: Q = aL + bL...

A: The marginal product function states the relationship between the additional quantities produced whe...


Q: Suppose students like to eat pepperoni pizza, bean and rice burritos, and hamburgers (made from beef...

A: The correct option for the above-mentioned question is option (c).


Q: Tea = -0.7*Price of Tea + 0.8*Income + 1.0* Price of Cofee   how does this equation show consumer be...

A: The equation Tea = -0.7*Price of Tea + 0.8*Income + 1.0*Price of Coffee, shows the behavior of consu...


Q: After reading the given descriptions, please place the correct label by the quadrant on the graph th...

A: Person Jol demands loan in this case. The amount of loan demanded by her lies on the lower portion o...


Q: Please thoroughly and completely explain what market-clearing equilibrium means. Don’t just copy s...

A: 1) When market demand is equal to its supply, the price is called the market clearing price. If ther...


Q: The term "society" can be described as: A: Organized human interactions B: Social structures or inst...

A: Society is the term that can be looked into as the collective sum of social interactions and network...


Q: A nation can  produce at a point outside its  PPF?

A: No, a nation cannot produce at a point outside its PPF


Q: Jane’s utility function on bundles of two commodities (x,y) is given by: U(x,y)=4x2y3. What is the v...

A: To calculate the value of Marginal Rate of Substitution.


Q: 1. The output per laborer per day in the production of steel and tin for Russia and China are given ...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...