Month 3, 3.21, 3.18, 3.09, 2.87

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Month 3, 3.21, 3.18, 3.09, 2.87

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Also, as costs and interest rates rise, makers will start reducing their expansion and purchasing activities. Over time, increased investment in labor-saving equipment will enable workers to become more productive as will advances in technology and better production processes. Outsourcing of labor rigorous creation to areas with a labor surplus as well as increased immigration will certainly reduce labor shortages (increased births will also do this, although it requires about twenty years before newborns enter the work force). Cost Push Inflation is another term associated with Keynesian economics, which refers to the purchase price level rising because of the increase in one or more critical resources.

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The resources in question are usually rising labor costs over the economy or quickly rising charges for a natural resource such as essential oil or food. Strong financial growth will most likely result in a decrease in the supply of labor as growing demand for employees by employers seeking workers as they increase their output. Other factors that can reduce the way to obtain labor, driving up income overall therefore, can be unions which action, usually with the backing of authorities, as cartels to limit the way to obtain labor artificially.

War may also reduce the supply of labor as the government, either or through conscription voluntarily, mobilizes much of the available manpower for armed forces duty. This reduction may be short term if the battle is brief and casualties light or long-term in the case of a long battle and/or heavy casualties. While not common today, plagues, like the Black Plague through the DARK AGES, have resulted in a big reduction in the way to obtain labor causing income to rise.

Oil is particularly critical in today’s world as it is a main energy source used in all phases of production. As the price tag on oil increases, companies throughout the supply chain end up paying more for both essential oil for energy and more for other inputs that consumed energy in their creation.

These increased prices are offered during each stage of creation resulting in rising prices throughout the economy. Like most cases of demand pull inflation, the cause of cost-push inflation is the market’s response to shortages. And, just as the market, if still left to itself, will modify to these changes and work itself out in the case of demand pull inflation it will also work itself out in the case of cost-force inflation.

Inflation is both an financial problem and a moral evil. While inflation is good for the economy as a whole never, it can, in its early stages at least, benefit certain groupings within the overall economy. This benefit for several groups however, comes at the trouble of others throughout the market.