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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...
Upward revision of administered prices
There are a number of commodities and services in public sector (like bus service, railways, etc.) for which the price levels are administered by the Government. The Government keeps raising these prices from time to time in order to cover the losses in the public sector. This also results in cost-push inflation.
Most Upvoted Answer
Upward Revision of administered prices results in _________.a)Demand-P...
Cost-Pull Inflation
Administered prices refer to prices that are set by the government or other regulatory bodies rather than by the market forces of supply and demand. When the government increases administered prices, such as taxes, fees, or tariffs, it can result in an upward revision of prices in the economy. This can lead to cost-push inflation, which is when rising costs of production lead to higher prices for goods and services.
Explanation:
Cost-push inflation occurs when the cost of production increases, leading to an increase in the prices of goods and services. This is because when the cost of production increases, producers have to charge higher prices to cover their expenses and maintain their profit margins. When administered prices are increased, it can lead to an increase in the cost of production for businesses. For example, if the government increases taxes on businesses, it can increase their costs, which can lead to an increase in the prices of goods and services.
In conclusion, an upward revision of administered prices can result in cost-push inflation, where rising costs of production lead to higher prices for goods and services.
Administered prices refer to prices that are set by the government or other regulatory bodies rather than by the market forces of supply and demand. When the government increases administered prices, such as taxes, fees, or tariffs, it can result in an upward revision of prices in the economy. This can lead to cost-push inflation, which is when rising costs of production lead to higher prices for goods and services.
Explanation:
Cost-push inflation occurs when the cost of production increases, leading to an increase in the prices of goods and services. This is because when the cost of production increases, producers have to charge higher prices to cover their expenses and maintain their profit margins. When administered prices are increased, it can lead to an increase in the cost of production for businesses. For example, if the government increases taxes on businesses, it can increase their costs, which can lead to an increase in the prices of goods and services.
In conclusion, an upward revision of administered prices can result in cost-push inflation, where rising costs of production lead to higher prices for goods and services.
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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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