Asked by Jessica Guerrero on Jul 06, 2024
Verified
Demand-pull inflation is worse than cost-push inflation because,in addition to higher prices,demand-pull inflation also reduces employment.
Employment
A state of having a paid job or occupation, contributing to an economy's workforce.
Demand-Pull Inflation
Inflation that occurs when aggregate demand in an economy outweighs aggregate supply, leading to an increase in prices.
Cost-Push Inflation
It occurs when the overall prices in an economy increase due to rising costs of wages and raw materials.
- Understand the concepts of demand-pull and cost-push inflation.
Verified Answer
LG
Leticia GutierrezJul 08, 2024
Final Answer :
False
Explanation :
Demand-pull inflation is typically associated with a growing economy where demand for goods and services increases, potentially leading to higher employment, whereas cost-push inflation, caused by rising production costs, can lead to reduced output and employment.
Learning Objectives
- Understand the concepts of demand-pull and cost-push inflation.