When price rise because of growing factors price , then that inflation is known as a) stagflation b) cost push inflation c) deflation d) demand full inflation
economics
- Shikha
- 31 Jul
- 19 Answers
19 Answers
19 Answers
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. Cost push Inflation. Cost push inflation is inflation caused by an increase in prices of inputs like labour, raw material, etc. The increased price of the factors of production leads to a decreased supply of these goods. While the demand remains constant, the prices of commodities increase causing a rise in the overall price level. This is in essence cost push inflation. There could be other factors leading to supply side inflation such as natural disasters or depletion of natural resources, monopoly, government regulation or taxation, change in exchange rates, etc. Generally, cost push inflation may occur in case of an inelastic demand curve where the demand cannot be easily adjusted according to rising prices.1Modal content
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