Why does everyone lose to cost-push inflation?

Expert Solution

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.

Due to Cost push inflation , every item in the economy got expensive due to which buyer purchasing power falls and all the necessary items of the economy become expensive . That's the reason due to cost push inflation , every household have to face inflation and everyone lose his/her purchasing power in the economy .

Rahul Sunny answered 2 years ago

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Why does everyone lose to cost-push inflation?

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