Cost-push inflation occurs when the total supply of goods and services in the economy which can be produced (aggregate supply) falls. A fall in aggregate supply is often caused by an increase in the cost of production.
Cost-push inflation happens whilst there is a decline in the deliver of goods and offerings and call for remains unchanged or maybe grows, driving expenses and inflation higher.
Cost-push inflation is inflation caused by a growth in the price of enter like labour/uncooked materials.
This ends in a reduced delivery of products. - rate upward push ought to result in addition wage demands, which in flip could result in a fee increase wage-rate spiral.
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