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What is Cost-push inflation
Cost-push inflation takes place when costs of production increase causing short-run aggregate supply curve to shift to left.
The main causes of cost-push inflation are rising prices of raw materials, gas, oil and food or a sudden increase in wage rates. Increased business costs imposed on firms squeeze profit margins and force firms to push up their prices which then causes cost-push inflation.
Cost-push inflation experienced in UK since 2009 has two major sources. First the devaluation of sterling on currency markets has made imported services and goods into the UK more costly. Second the global increases just noted in prices of energy, food and commodities have been causing a cost-push inflation in the UK.
What is Monetary base The monetary base is defined as the total value of all currency (banknotes and coins) outside the central bank and commercial banks' (net) reserves with t
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Cost Reduction Positive measures to effect a lowering of costs include: reducing national insurance contributions (an ad valorem tax on employing labor);
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