Answer to Question #16183 in Economics of Enterprise for a n m

Question

Will the following lead to cost-push or demand-pull inflation, or both?

(a) The Reserve Bank cuts interest rates and the economy booms.
Cost-push / Demand-pull / Both

(b) As a result of falling unemployment, trade unions become more militant and demand higher wages.
Cost-push / Demand-pull / Both

(c) The government raises the rate of GST. Cost-push / Demand-pull / Both

(d) The government cuts income tax rates and raises government expenditure at a time of near full employment.
Cost-push / Demand-pull / Both

(e) Increasing industrial concentration leads to more oligopolistic collusion to raise prices.
Cost-push / Demand-pull / Both

Answer 1

a) Cost-push
b) Cost-push
c) Demand-pull
d) Demand-pull
e)
Demand-pull