Cost Push Inflation Diagram With Explanation. It is the cost factors that pull the prices up ward. These components of supply are also part of the four factors of production.
This happens when the cost of production increases and pushes the price level. Cost push inflation is when supply costs rise or supply levels fall. Higher price of commodities.
Cost push inflation can lead to lower economic growth and often causes a fall in living standards though it often proves to be temporary.
It is the cost factors that pull the prices up ward. This happens when the cost of production increases and pushes the price level. One of the important causes of price rise is the rise in price of raw materials. The cost push inflation can also be illustrated with the aggregate demand and supply curves.
