Answer to Question #236428 in Macroeconomics for KAT

Question

write a note on

1) cost push inflation

2) function of money

Answer 1

1.Cost-push inflation occurs when the cost of labor and raw materials rises, causing overall prices to rise (inflation). Cost-push inflation occurs when increasing production costs reduce the economy's aggregate supply (the total amount of output).

2.Money has taken different forms throughout history, but it has always served three purposes: as a store of value, a unit of account, and a medium of exchange.