Which of the following is a cause ofCost-Push Inflation?а.Lower prices for raw materialsb.Lower labor costsС.Increases in the costs to produced.Higher tax discounts on products

Cost push inflation arises from a decrease in aggregate supply, which is caused by an increase in…

Answered: Which of the following is a cause of…

Business

Economics

Which of the following is a cause of Cost-Push Inflation? a. Lower prices for raw materials

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter17: The Trade-off Between Inflation And Unemploy

Section: Chapter Questions

Problem 5DQ

See similar textbooks

Related questions

Q: Explain the negative effects of high inflation

A: Please find the answer below. INFLATION: Inflation is the rate of increase in prices over a given…

Q: hat are the causes and effects of inflation

A: Inflation is the increase in the general price level. A decrease in the general price level refers…

Q: Solve the attachment.

A: Inflation measures the changes in the price level. Unexpected inflation occurs when the actual…

Q: Define inflation, it's types, sources of inflation? What intervention measures are taken by the…

A: Inflation:- Inflation can be explained as the overall, steady rise in the price of items in an…

Q: Explain with the support of graph(s), demand-pull and cost push inflation

A: The rate at which prices rise over time is referred to as inflation. Inflation is typically defined…

Q: In which of the following conditions is the inflation rate likely to rise and the unemployment rate…

A: Stagflation is when there is high inflation and the economic output(o/p) stagnates. The rate of…

Q: Which of the following statements would you DISAGREE with Explain why ? 1. Higher than anticipated…

A: According to the given statements, three statements are true and one statement is false.

Q: (a) Identify five causes of rampant inflation and explain how these manifested in - Zimbabwe?

A: Hyperinflation is a situation in which when the prices of commodities in a country tend to increase…

Q: What are the costs associated with inflation? (Check all that apply) O A. Stagnant real wages. OB.…

A: The inflation is taken into account to be bad for an economy mainly because it destroys the…

Q: What is cost push inflation ? Please explain with example .

A: Inflation is a scenario where the average price of final goods and services becomes higher in…

Q: Explain what is the cost of inflation? Why is menu cost and shoeleather cost are one of the…

A: Inflation is the change in the price level, the change in the price of a basket of goods is…

Q: If inflation rises unexpectedly by 5%, indicate for each of the following whether the economic actor…

A: Inflation refers to a general increase in the price level of goods and services, demanded by…

Q: What type of inflation is likely to occur if labor costs increase? a. Built in inflation b.…

A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…

Q: What are the costs of inflation? a. All of the above b. Import becomes expensive c. Borrowers loose…

A: the increment in the cost of items or services because of raw components and wages costing more

Q: Suppose that people expect inflation to equal 6 percent, but in fact, prices rise by 4 percent.…

Q: Inflation is the result of increases in the cost of production. This kind of inflation is known as-…

A: The increase in prices associated with goods and services in the market is referred to as inflation.…

Q: Another term used todescribe negative inflation is: a)hyperinflation b)deflation c)counter…

A: Inflation refers to continues increase in the general price level, which reduces the consuming power…

Q: Will the following lead to cost-push or demand-pull inflation? (a) The discovery of a large and…

A: Demand pull inflation in the country is triggered by a rise in the country’s total demand. The…

Q: Suppose Friendly Airlines is considering signing a long-term contract with the union representing…

A: Inflation is the rise in the aggregate price level. The inflation is harmful for the economy as the…

Q: a. What does the term inflation mean? If meat prices go up, does this automatically mean that there…

A: Answer: Inflation: Inflation refers to the rate of increase in the price of a basket of goods and…

Q: Explain, with the aid of a graph, the demand-pull inflation as a cause of inflation.

A: The demand-pull inflation is so named because it occurs from the demand side of the market. This…

Q: explain the difference between cost push and demand pull inflation using diagrams

A: Inflation happens when the price level of services and goods increases, leading to reduced…

Q: Explain (define) the terms given below with appropriate examples. a) Inflation b) Deflation c)…

A: a) Inflation: Inflation is the rate of rising prices over a given period of time. In general words,…

Q: The price-wage spiral is associated with which type of inflation? a. Cost push b. Demand pull c.…

A: The increased wages will result in increased income and increased demand for goods and services. As…

Q: d to i

A: The natural rate is referred by central banks while making decisions about the bank rate since this…

Q: What causedthe Great Inflation of the 1970s, and why has inflation been so much lowerin recent…

A: The year 1970 was a period of high inflation and low Economic growth. The main reasons for high…

Q: With the aid of graphs, explain: (a) demand-pull inflation (b) cost-push inflation.

A: The inflation refers to the rise in the prices of the goods and services over a period of time. It…

Q: Will the following lead to cost-push or demand-pull inflation? (5%) (a) The discovery of a large and…

A: A condition when the nation sees a surge in the levels of prices in the nation, a situation of…

Q: For a very long time the country of Tofu has had an inflation rate of percent. Saddenly its…

A: Inflation refers to the continuous increase in general price level. Money supply and inflation are…

Q: There are no costs associated with inflation if the inflation rate is perfectly anticipated. Select…

A: Inflation is responsible for the rise in price levels over time. The quantity of a good would…

Q: The menu costs of inflation A. occur because businesses need to change prices frequently. B. occur…

A: Inflation is known or gradually classified as the immense rise or increase in the prices of the…

Q: What is inflation? How it is measured? What fiscal and monetary policies are generally adopted to…

A: Inflation is a sustained increase in the general (aggregate) price level in the economy. If…

Q: Explain the pros and cons of inflation.

A: The nations tend to operate upon the basis of the expenditures which various entities do in the…

Q: 53 According to your own research, which one is the item (mention only one good or service) that is…

A: ANSWER Increase in fuel oil contributes higher inflation in US in 2021. Negative supply shock…

Q: Suppose that sacrifice ratio is 4 and the goal is to decrease inflation by 5%. What Would the price…

A: Inflation means the rise in the price level of goods and services in an economy. It means the…

Q: High and unexpected inflation has a greater cost Select one: a. for those who hold a little money…

A: Unexpected and high inflation implies that the value of money falls. Hence, for those who hold a…

Q: Suppose that people expect inflation to equal 3 percent, but in fact, prices rise by 5 percent.…

A: Inflation rate is a measure of the percentage change in the price index from the preceding period.…

Q: If inflation rises unexpectedly by 5%, indicate foreach of the following whether the economic actor…

A: The general increase in the level of prices of services and goods or living standards in the economy…

Q: In Zimbabwe the increase charge of the quantity of coins prolonged from fifty percent a year to…

A: Macroeconomics is a part of economics that deals with production, decision and allocation concerning…

Q: Explain one harm associated with unexpected inflation that is not associated with expected…

A: Expected inflation is the inflation that economic agents expect in the future. Expected inflation…

Question

Which of the following is a cause of
Cost-Push Inflation?
а.
Lower prices for raw materials
b.
Lower labor costs
С.
Increases in the costs to produce
d.
Higher tax discounts on products

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1.

VIEW

Step 2.

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Inflation rates, like most statistics, are imperfect measures. Can you identify some ways that the inflation rate for fruit does not perfectly capture the rising price of fruit?
The total price of purchasing a basket of goods in the United Kingdom over four years is: year 1=940, year 2=970, year 3=1000, and year 4=1070. Calculate two price indices, one using year 1 as the base year (set equal to 100) and the other using year 4 as the base year (set equal to 100). Then, calculate the inflation rate based on the first price index. If you had used the other price index, would you get a different inflation rate? If you are unsure, do the calculation and find out.
Identity several parties likely to he helped and hurt by inflation.
If inflation rises unexpectedly by 5, indicate for each of the following whether the economic actor is helped, hurt, or unaffected: A union member with a COLA wage contract Someone with a large stash of cash in a safe deposit box A bank lending money at a fixed rate of interest A person who is not due to receive a pay raise for another 11 months
Use the AD/AS model to explain bow an inflationary gap occurs, beginning from the initial equilibrium in Figure 25.6.
Oil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% sinceJune, after Russian and Saudi Arabian production cuts and rising demand from China. With many industries being heavily reliant on energy and transportation, what type of inflation would this leadto in South Africa?A. Demand-pull inflationB. Cost-push inflationC. StagflationD. Hyperinflation
Oil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% sinceJune, after Russian and Saudi Arabian production cuts and rising demand from China.With many industries being heavily reliant on energy and transportation, what type of inflation would this leadto in South Africa?A. Demand-pull inflationB. Cost-push inflationC. StagflationD. HyperinflationWhat is one of the potential effects of the aforementioned inflation on the South African economy?A. Decreased purchasing power of money.B. Increased consumer savings.C. Reduced interest rates on loans.D. Higher demand for imports.
A measure of inflation that US goverment staticians calculate based on the price lecel from a fixed basket of goods and sercices that represents te average consumers purchases a- core inflation index b- GDP deglator c- the employment cost index d consumer price index CPI
Expected inflation is 3%, and initially the output gap is zero (percent). A(surprise) tariff reduction on imported steel and aluminum- which are used widely in domestic production-results in (unexpected) cost-push inflation of -0.5%. Imports rise, leading to (unexpected) demand-pull inflation of -0.25%. The economy's actual rate of inflation is: A. 2.25% B. 2.50% C. 2.75% D. 3.00% E. 3.75%
If inflation rises unexpectedly by 5%, indicate foreach of the following whether the economic actor ishelped, hurt, or unaffected:a. A union member with a COLA wage contractb. Someone with a large stash of cash in a safedeposit boxc. A bank lending money at a fixed rate of interestd. A person who is not due to receive a pay raise foranother 11 months
In Zimbabwe the increase charge of the quantity of coins prolonged from fifty percent a year to 66,700 percent a year in 2007. Accordingly the inflation charge in Zimbabwe skyrocketed, from 56 percent a year in 2000 to 24,000 percent a year in 2007. The increase charge of real GDP amongst the ones years is extra tough to diploma but have become probably -30 percent in keeping with year. a. How can we understand that Zimbabwe's referred to inflation amongst 2003 and 2007 is sort of simply below the real inflation charge?
Another term used todescribe negative inflation is: a)hyperinflation b)deflation c)counter inflation d)GDP deflator