What is cost push inflation?
Cost push inflation is the result of an increase in the price of the factors of production e.g. labour, raw materials. For example, an increase in the price of oil will increase the price of most raw materials. Firms will have to increase their prices to sustain the same level of profits. This increase in price across the economy is cost push inflation.
NO
Related Economics A Level answers
All answers ▸Why do higher interest rates cause the exchange rate of a currency to rise?
Evaluate whether growing market concentration and monopoly power is necessarily undesirable.
Explain why the use of petrol and diesel cars may be a source of market failure.
Explain the term 'recession' and analyse two possible causes of a recession.