Critically analyse how an increase in wages can lead to cost-push inflation as well as demand-pull...
Homework Answers
Cost push inflation occurs when higher production cost causes a decrease in the short run aggregate supply and thus causing inflation. On the other hand, demand pull inflation is caused by an increase in the aggregate demand.
Increase in wages increases cost of production, thereby decreasing short run aggregate supply. SRAS curve shifts leftward. As a result, equilibrium price level goes up, inflation occurs. This inflation is known as cost push inflation.
Increase in wages increases disposable income of consumers. Now they have more money to spend. As a result, consumer spending increases. This will increase aggregate demand, shifting the AD curve rightward. As a result, equilibrium price level goes up, inflation occurs. This inflation is known as demand pull inflation as it is caused by the change in AD.
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Critically analyse how an increase in wages can lead to cost-push
inflation as well as demand-pull...
Question one a Critically analyse how an increase in wages can lead to cost-push inflation as...
Question one a Critically analyse how an increase in wages can lead to cost-push inflation as well as demand-pull inflation (10 MARKS]. Question one B The per capita income in Ghana and Nigeria for the year 2019 are 4605 and 5927 dollars respectively. Discuss the flaws of using these figures to suggests that the welfare of people living in Nigeria is better than those living in Ghana. [10 MARKS]
inflation caused by an increase in money supply is called: a demand pull b cost push...
inflation caused by an increase in money supply is called: a demand pull b cost push c administrative inflation d a combination of administrative and speculative inflation
What are examples of demand pull and cost push inflation?
What are examples of demand pull and cost push inflation?
What is inflation? What is the difference between demand-pull and cost-push inflation? Have you seen any...
What is inflation? What is the difference between demand-pull and cost-push inflation? Have you seen any evidence of increased inflation where you live? How is inflation calculated?
40. Inflation initiated by increases in wages or other resource prices is labeled A) demand-pull inflation....
40. Inflation initiated by increases in wages or other resource prices is labeled A) demand-pull inflation. B) cost-pull inflation. - C) cost-push inflation. D) pull-cost inflation. 1. Cost-push inflation: A) is caused by too little total spending B) moves the nation's production possibilities curve leftward. C) moves the economy outward from its production possibilities curve. D) moves the economy production possibilities curve rightward. - Cost-push inflation may be caused by: A) a decline in per unit production costs. B) an...
1) Cost-push supply shocks & demand-pull shocks are Keynesian theories of a. welfare benefits. b. inflation...
1) Cost-push supply shocks & demand-pull shocks are Keynesian theories of a. welfare benefits. b. inflation episodes. c. labor force participation. d. wartime.
Question 1 (Inflation and the Macroeconomy) Distinguish between demand-pull inflation and cos (aggregate demand/aggregate supply) model...
Question 1 (Inflation and the Macroeconomy) Distinguish between demand-pull inflation and cos (aggregate demand/aggregate supply) model to illustrate the theoretical effects of these two types of inflation on the price level (P), employment (L) and economic growth (real GDP) the short run. Now identify the various factors that have contributed towards demand-pul inflation and cost-push inflation in South Africa and critically analyse whether they are consistent with the predictions of the AD-AS model. (20 marks) Question 2 (Global Developments) Use...
Define demand-pull inflation. Using the AS/AD model, explain how demand-pull inflation affects the level of aggregate...
Define demand-pull inflation. Using the AS/AD model, explain how demand-pull inflation affects the level of aggregate output and the price level in the economy (which curve shifts, in what direction, and what happens to equilibrium output and price level). Give an example of macroeconomic policy that can be used to counter the effects of demand-pull inflation and discuss its effect on the equilibrium output and price level.
Illustrate and briefly explain the beginning of a demand-pull inflation. 3. When answering parts a and b,...
Illustrate and briefly explain the beginning of a demand-pull inflation. 3. When answering parts a and b, draw the relevant Phillips curve. Using a short-run Phillips curve, what is the effect on the unemployment rate if the inflation rate unexpectedly rises. Using a long-run Phillips curve, what is the effect on the unemployment rate if the inflation rate rises and people expect the rise. Explain how your answer to part a about the unexpected rise in the inflation rate changes in...
Demand-pull inflation can start when O A. unemployment is above the natural rate O B. aggregate supply decreases....
Demand-pull inflation can start when O A. unemployment is above the natural rate O B. aggregate supply decreases. O C. people incorrectly forecast inflation. O D. input costs rise. O E. aggregate demand increases. Read the news clip, then answer the following question. Pakistan: Is it Cost-Push Inflation? Pakistan is experiencing inflation With CPI already spiking 11.8 percent for the first ten months of the fiscal year, the average CPI inflation for the same period last year stood at 22.35...
Question one a Critically analyse how an increase in wages can lead to cost-push inflation as well as demand-pull inflation (10 MARKS]. Question one B The per capita income in Ghana and Nigeria for the year 2019 are 4605 and 5927 dollars respectively. Discuss the flaws of using these figures to suggests that the welfare of people living in Nigeria is better than those living in Ghana. [10 MARKS]
40. Inflation initiated by increases in wages or other resource prices is labeled A) demand-pull inflation. B) cost-pull inflation. - C) cost-push inflation. D) pull-cost inflation. 1. Cost-push inflation: A) is caused by too little total spending B) moves the nation's production possibilities curve leftward. C) moves the economy outward from its production possibilities curve. D) moves the economy production possibilities curve rightward. - Cost-push inflation may be caused by: A) a decline in per unit production costs. B) an...
Question 1 (Inflation and the Macroeconomy) Distinguish between demand-pull inflation and cos (aggregate demand/aggregate supply) model to illustrate the theoretical effects of these two types of inflation on the price level (P), employment (L) and economic growth (real GDP) the short run. Now identify the various factors that have contributed towards demand-pul inflation and cost-push inflation in South Africa and critically analyse whether they are consistent with the predictions of the AD-AS model. (20 marks) Question 2 (Global Developments) Use...
Define demand-pull inflation. Using the AS/AD model, explain how demand-pull inflation affects the level of aggregate output and the price level in the economy (which curve shifts, in what direction, and what happens to equilibrium output and price level). Give an example of macroeconomic policy that can be used to counter the effects of demand-pull inflation and discuss its effect on the equilibrium output and price level.
Demand-pull inflation can start when O A. unemployment is above the natural rate O B. aggregate supply decreases. O C. people incorrectly forecast inflation. O D. input costs rise. O E. aggregate demand increases. Read the news clip, then answer the following question. Pakistan: Is it Cost-Push Inflation? Pakistan is experiencing inflation With CPI already spiking 11.8 percent for the first ten months of the fiscal year, the average CPI inflation for the same period last year stood at 22.35...
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