Cost push inflation
Cost-Push inflation refers to the prices of goods and services increases because of an increase in the cost of wages and raw materials. The bottlenecks include the fluctuations in the prices of agricultural products, the weak infrastructure of the economy will lead to the cost-push inflation
Government should engage in public works projects necessary to society
Adam Smith disagrees the involvement of government in economic activity. He gave much importance to self-correction of the economy called laissez-faire.
is useful even though it simplifies reality
Economic theory is useful because it simplifies the realities.
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