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Upward Revision of administered prices results in _________.
- a)Demand-Pull inflation
- b)Cost-Pull inflation
- c)Stagflation
- d)Deflation
Correct answer is option 'B'. Can you explain this answer?
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Upward Revision of administered prices results in _________.a)Demand-P...
Cost-Pull Inflation
Cost-pull inflation occurs when the costs of production increase, leading to a rise in prices. When administered prices are revised upwards, it directly affects the cost of production for businesses, which in turn leads to cost-push inflation.
Administered Prices
Administered prices are prices that are set by the government or other regulatory bodies, rather than by market forces. These prices can include things like fuel prices, utility rates, and public transportation fares.
Upward Revision
When administered prices are increased, businesses that rely on these goods or services will face higher production costs. This can be due to increased expenses for inputs, transportation, or other factors. As a result, businesses may pass on these increased costs to consumers in the form of higher prices for their products or services.
Impact on Inflation
The upward revision of administered prices can contribute to overall inflation in the economy. As businesses raise their prices to cover higher production costs, consumers may experience an increase in the cost of living. This can lead to a general rise in prices across the economy, known as inflation.
In conclusion, an upward revision of administered prices results in cost-pull inflation, as it directly impacts the cost of production for businesses and contributes to a general increase in prices in the economy.
Cost-pull inflation occurs when the costs of production increase, leading to a rise in prices. When administered prices are revised upwards, it directly affects the cost of production for businesses, which in turn leads to cost-push inflation.
Administered Prices
Administered prices are prices that are set by the government or other regulatory bodies, rather than by market forces. These prices can include things like fuel prices, utility rates, and public transportation fares.
Upward Revision
When administered prices are increased, businesses that rely on these goods or services will face higher production costs. This can be due to increased expenses for inputs, transportation, or other factors. As a result, businesses may pass on these increased costs to consumers in the form of higher prices for their products or services.
Impact on Inflation
The upward revision of administered prices can contribute to overall inflation in the economy. As businesses raise their prices to cover higher production costs, consumers may experience an increase in the cost of living. This can lead to a general rise in prices across the economy, known as inflation.
In conclusion, an upward revision of administered prices results in cost-pull inflation, as it directly impacts the cost of production for businesses and contributes to a general increase in prices in the economy.
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Upward Revision of administered prices results in _________.a)Demand-Pull inflationb)Cost-Pull inflationc)Stagflationd)DeflationCorrect answer is option 'B'. Can you explain this answer?
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Upward Revision of administered prices results in _________.a)Demand-Pull inflationb)Cost-Pull inflationc)Stagflationd)DeflationCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Upward Revision of administered prices results in _________.a)Demand-Pull inflationb)Cost-Pull inflationc)Stagflationd)DeflationCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Upward Revision of administered prices results in _________.a)Demand-Pull inflationb)Cost-Pull inflationc)Stagflationd)DeflationCorrect answer is option 'B'. Can you explain this answer?.
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