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Cost-Push Inflation
       
 
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Cost-Push Inflation

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Cost-Push Inflation
When Inflation increases because of a rise in the costs of production.
    
This is a phenomenon in which the general price levels rise (Inflation) due to increases in the cost of wages and raw materials.
    
Cost-push Inflation develops because the higher cost of production factors decreases in aggregate supply (the amount of total production) in the economy. Because there are fewer goods being produced (supply weakens) and demand for these goods remains consistent, the prices of finished goods increase (Inflation).
Posted by  LISA Life Insurance Settlement Association
 
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