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inflation and interest rates L10 M2 economics
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Question:
Causes of cost push inflation
Author: Dakota howellsAnswer:
1. Rising labour costs perhaps due to an increased minimum wage 2. Higher global prices for components and raw materials including imported energy 3. A depreciation in the external value of the exchange rate which then causes a rise in imported prices – many imported priced in us dollars 4. An increase in indirect taxes such as higher VAT or environmental taxes such as carbon tax
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