5.4.2 - Increase in Cost of Production
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Practice Questions
Test your understanding with targeted questions
What is cost-push inflation?
💡 Hint: Think about what happens when costs of goods increase.
Name one factor that can cause an increase in cost of production.
💡 Hint: What do workers get paid?
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Interactive Quizzes
Quick quizzes to reinforce your learning
What type of inflation is caused by increases in production costs?
💡 Hint: What happens when production becomes more expensive?
True or False: An increase in wages necessarily leads to cost-push inflation.
💡 Hint: Consider the effects of higher labor costs on businesses.
2 more questions available
Challenge Problems
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Suppose the price of critical raw materials increases by 20%. Analyze how this change would affect the price of finished goods in a manufacturing industry.
💡 Hint: Consider the relationship of raw materials to the final product cost.
Suppose the government implements a wage increase policy. Discuss the potential consequences these policies might have on inflation and general prices.
💡 Hint: Think of the ripple effects of higher salaries.
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