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http://en.wikipedia.org/wiki/Cost-push_inflation
Exaggerated Example:
Lets say the US had no oil at all. Then suddenly and rapidly (rapidly is the key like 3-6 months) the cost of oil went from $40/barrel to $4000/barrel. Because it happened so fast, the market could not come up with a better alternative. Businesses that rely on oil for operating or personal people rely on oil to get from point A to point B can't do so at a reasonable cost.
Typically Cost-push inflation will not happen because companies and governments are smart. If the cost goes too high, it will impact quantity and most importantly accelerates the development of alternative technologies that ultimately compete and reduce the cost for everyone.
I think the oil companies saw this with $4.00 gas. Suddenly everyone wanted a battery powered car and those technologies got a huge influx in cash. Given gas at $6 or $8/gallon, other options would eventually catch up and compete.
What else can I help you with?
What is the result of a recession on unemployment compensation?
A recession can bring an increase of unemployed workers. This results in more unemployment compensation claims being filed and paid, meaning more people are collecting unemployment benefits.
What is the difference between recession and prosperity?
They are complete opposites. Recession means growth rate is up, employment is down, and inflation is in the making. Prosperity, is the result of economic growth. Wealth is strong, a sort of reconstruction of the government's finale.
Why is there a decrease in production during a recession?
During a recession, there is a decrease in production because there is lower demand for goods and services. This leads to businesses producing less in order to match the reduced demand, which can result in layoffs and reduced economic activity.
Recession is spreading like virus examine the impact of recession on stock market and mutual fund?
recession
What is global recession?
Global recession is a period of economic slowdown. The Great Depression and Great Recession are two periods in time that experienced global recession.
The Roosevelt recession may have been the result of?
There was no "Roosevelt" recession. There was a depression caused by the Wall Street crash of 1929, which occurred under the previous Administration.
What is the result of a recession on unemployment compensation?
A recession can bring an increase of unemployed workers. This results in more unemployment compensation claims being filed and paid, meaning more people are collecting unemployment benefits.
What is a cause of Stillman's clefts?
Stillman's clefts are caused by gingival recession, which is the exposure of the tooth roots due to loss of gum tissue. This recession can be a result of factors such as aggressive brushing, gum disease, or malocclusion.
What is the difference between recession and prosperity?
They are complete opposites. Recession means growth rate is up, employment is down, and inflation is in the making. Prosperity, is the result of economic growth. Wealth is strong, a sort of reconstruction of the government's finale.
Why is there a decrease in production during a recession?
During a recession, there is a decrease in production because there is lower demand for goods and services. This leads to businesses producing less in order to match the reduced demand, which can result in layoffs and reduced economic activity.
Are you in a depression or recession?
The world is in a big recession.
What is the adjective of recession?
The adjective of recession is recessionary.
Recession is spreading like virus examine the impact of recession on stock market and mutual fund?
recession
What are Advantages and disadvantages of recession?
advantages and disadvantages of recession
What is global recession?
Global recession is a period of economic slowdown. The Great Depression and Great Recession are two periods in time that experienced global recession.
Which statement is trueA recession is shorter than a depression.A recession occurs when the federal budget is balanced.A recession is closely related to a presidential veto of an act of Congress.A recession is longer than a depression?
A recession is shorter than a depression.
Which economic trend might happen as a result of abnormal weather such as drought or flooding?
It can lead to negative effects on the economic activity and can even cause a recession.
