Define Cost-Push Inflation

question 84

Essay

Define cost-push inflation. Using an AS/AD diagram, illustrate how cost-push inflation affects the level of aggregate output and the price level in the economy. Suppose that the government uses expansionary fiscal policy to counter the effects of the cost-push inflation. Indicate on the diagram the impact of this policy on the price level and level of aggregate output.

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Definitions:

Dominant Gene

The prevailing gene.

Genetic Map

A graphical representation of the arrangement of genes or sequences on a chromosome.

Posterior

Toward the rear or back or toward the caudal end.

Pathophysiology

The study of mechanisms by which disease occurs, the responses of the body to the disease process, and the effects of both on normal function.