[Solved] Which of the following best describes the wage-price spiral in inflation? — Ans: A cycle where rising wages lead to higher prices, which in turn cause wages to... | Economic Awareness

Economic Awareness - Sectors of Indian Economy

Which of the following best describes the wage-price spiral in inflation?

AA decline in wages due to technological progress

BA situation where wages fall causing prices to decrease

CGovernment fixing wages to control inflation

DA cycle where rising wages lead to higher prices, which in turn cause wages to rise further

Step-by-Step Solution

Step 1: Understand wage-price spiral
The wage-price spiral is a process where wages and prices push each other up in a continuous cycle.
Step 2: Analyze options
Falling wages or government fixing wages do not describe the spiral. Decline in wages due to technology is unrelated.
Final Answer:
A cycle where rising wages lead to higher prices, which in turn cause wages to rise further → Option D
Quick Check:
Wage-price spiral = wages and prices push each other up ✅

Quick Trick: Wage-price spiral fuels built-in inflation.

Common Mistakes:

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