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- If wages rise, firms will try to pass on the cost increases to customers - leading to cost push inflation.
- If wages rise, workers have an increase in income leading to higher disposable income and higher spending. - this can cause demand pull inflation.
However, it is possible that even with a shortage of labour we may avoid inflation.
- If firms have monopsony power and can avoid paying higher wages despite the shortage
- If vacancies are being filled by migrants from abroad. (though you could say if migrants can enter the labour market then there isn't a shortage, but, in the boom years of 2003-07, migrant labour was important for keeping inflationary pressures low in economies like Ireland and UK.
- If other inflationary pressures are muted. A shortage of labour puts upward pressure on wage increases, but, other factors affect inflation. If interest rates are being increased and the economy is experiencing efficiency savings, overall inflation may not be affected very much.
What else can I help you with?
A major cause of inflation and consumer worry in the 1970s was the surging cost of?
Oil. (:
How much do higher gasoline prices contribute to inflation?
It's the contrary, inflation contributes to higher gasoline prices. But not so much as everybody thinks. The major cause for increasing gasoline prices is the resource. Less resource for higher demand, higher prices
A small discribtion of the cause of the inflation?
i think that the major cause of inflation is the way banks and lending companies create money out of thin air to lend. that plus the creation of money in mints adds up and eventually there is more money floating around than ft knox has gold to back it up with. so, to compensate, we make the dollar worth less so that we only have as much money as gold.
What has been a major cause of the increase in the supply of labor in the last 35 years?
A major cause of the increase in the supply of labor over the last 35 years has been globalization, which has expanded job opportunities and facilitated migration. Advances in technology and communication have allowed businesses to operate internationally, leading to a greater demand for workers across borders. Additionally, demographic changes, such as increased participation of women in the workforce and aging populations in developed countries, have also contributed to a larger labor supply. These factors combined have significantly influenced labor market dynamics globally.
What was one of the major causes of inflation and a recession in the US during the 1970 and early 1980?
Gas crisis
A major effect of the war labor shortage was?
A great migration of southern African-Americans to northern cities
A major cause of inflation and consumer worry in the 1970s was the surging cost of?
Oil. (:
Why did inflation occur in both the North and the South during the Civil War?
The limited supply of goods caused prices to rise.
What was the first the major problems in Jamestown?
There was a food shortage...
What was one the major problems in Jamestown?
There was a food shortage...
What was one of the first major problem in janestown?
The shortage of food.
What was one of the first major problems in Jamestwon?
shortage of food
What was the major cause of slavery development?
The development was caused by the agriculture industry in South America and the need of slaves for labor.
How much do higher gasoline prices contribute to inflation?
It's the contrary, inflation contributes to higher gasoline prices. But not so much as everybody thinks. The major cause for increasing gasoline prices is the resource. Less resource for higher demand, higher prices
A major foreign concern for the Nixon administration?
inflation
One of the major hardships faced by the Confederacy during the war was?
A food shortage
Which was one of the first major problems in jamestown?
Food shortage, checked it on apex
