- Oil prices increase as OPEC (It is an organization of countries sell oil) cuts it's supply. It is a cost push Inflation.Because the price of oil is increase and as OPEC cuts it's supply So the supply shit left so it is a cost push.
- Skills shortages in engineering industries lead to higher wages. This one is also a Cost push Inflation.Because the skills shortages so the company need to spend more money to engage people who have those skills.Which mean is the company have to give more wages for those people who have skills, so the cost of production rise.So the price of the products will increase .... Then we can know this is a cost push Inflation. Because it is not about the Aggregate Demand increase.
- A wet summer raises the price of vegetables in the supermarket. This is a Cost push Inflation. A raises price of vegetables may because the demand is too high or the supply is too low .And in the question it mention it is a wet summer, I think probably means the supply affect by the weather and decrease.So I think this one is a cost push but I am not sure.
- A rise in the world price of copper used in the telecommunications industry. It is a Cost push Inflation. Because the price of the world of copper used is increase .So because of that the supply will decrease .So it is a cost push.
- The government announces a rise in the standard rate of Value Added Tax (VAT) from 17.5% to 20%. This is a Cost push Inflation. VAT it is a tax on production .So will cause the supply decrease so it is a cost push.
I thouhht I understood very well after the lessons this afternoon but when I come back home and think about them again I feel very confusing like now.... @_@....So that why I need to do lots of exercises... And I should not afraid to make mistakes ,I must learn from my mistake and then I will make a even bigger progress. ^_^...
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The Austrian School: The arguments of the economists belonging to the Austrian School of Thought go against the concept of Cost Push Inflation. In their view, enhancement of the cost of goods and services does not necessarily bring about inflation, without cooperations from the government and the central banking sectors of a country. According to these economists, with the supply of money remaining constant, escalation in the cost of goods or services will reduce the money available for other goods and services, As a result, prices of certain commodities will decrease, initiating the rise in the prices of those goods whose prices have already increased.
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