Economic Awareness - Sectors of Indian Economy
If inflation is caused primarily by rising input costs, which group is most likely to suffer losses?
If inflation is caused primarily by rising input costs, which group is most likely to suffer losses?
medium Q8 of 15
Step-by-Step Solution
Step 1: Understand cost-push inflation
Cost-push inflation occurs when input costs rise, increasing production expenses.Step 2: Analyze impact on producers
If producers cannot raise output prices proportionally, their profit margins shrink, causing losses.Final Answer:
Producers → Option DQuick Check:
Producers = correct ✅
Quick Trick: Cost-push inflation squeezes producers' profits.
Common Mistakes:
- Assuming producers always gain during inflation.
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