Asked by la douce Fleur on Jul 06, 2024
Verified
The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.
Cost-Push Inflation
Inflation caused by an increase in the costs of production, such as higher wages or material costs, leading to decreased aggregate supply.
Union Wage
The standard wage rate established through collective bargaining by unions on behalf of their members.
- Comprehend the principles of demand-pull and cost-push inflation.
Verified Answer
VC
Viviana CantuJul 06, 2024
Final Answer :
True
Explanation :
Cost-push inflation is caused by a decrease in aggregate supply due to an increase in the cost of production, such as an increase in wages. If union wage demands lead to higher wages, it can increase the cost of production for firms and lead to cost-push inflation.
Learning Objectives
- Comprehend the principles of demand-pull and cost-push inflation.