Economy, asked by munna2188, 17 days ago

How does the demand fueled inflation differ from the cost fueled inflation? How can they be controlled? -04
Need 4 mark answer

Answers

Answered by sr3411095
4

Answer:

Cost-push inflation is the decrease in the aggregate supply of goods and services stemming from an increase in the cost of production. ... Demand-pull inflation can be caused by an expanding economy, increased government spending, or overseas growth.

Answered by Anonymous
0

In demand fueled, as price increases so does wage rate, whereas in cost as wage rate increases so the price.

  • The gradual rise in price level leads to a marked escalation in wage rate in event of demand inflation. Whereas, in the former one, a rise in wage rate leads to an escalation in cost level.
  • As time gap between a price rise and a salary raise is less than a year, and index numbers computation is restricted to yearly data, these changes are reflected by relevant index numbers, which fail to identify what leds to what.
  • These can be controlled as -
  1. Implementation of strict monetary policy.
  2. Implementation of effective fiscal policy.
  3. Boosting the interest rate
  4. Reducing government spending, or increasing the taxes
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