Practice mode Monetary, Fiscal And Incomes Policy, And Inflation

Under which type of inflation do prices rise in one sector, stay the same in another and increase overall?

Correct answer C. Ratchet inflation

Explanation

Ratchet inflation arises because prices rise easily in sectors with excess demand but rarely fall in sectors with excess supply, so the average price level ratchets upwards.

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Under which type of inflation do prices rise in one sector, stay the same in another and increase overall?

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Under which type of inflation do prices rise in one sector, stay the same in another and increase overall?

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