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Questions
What is meant by cost-push inflation?
Define cost-push inflation.
What is Cost-Push inflation?
Solution
An increase in the general price level of an economy with an increase in the average cost of production is called cost-push inflation. Cost-push factors are an increase in the wage rate, increase in the prices of raw materials etc. Producers increase the prices of goods and services in order to maintain the profit rates after an increase in the cost of production.
Notes
Students should refer to the answer according to their questions.
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