An inflationary situation in an economy which results out of a process of wage and price interaction ‘when wages press prices up and prices pull wages up’ called:
A. Inflationary gap
B. Deflationary gap
C. Inflation spiral
D. Seignorage
Answer:C
An inflationary situation in an economy which results out of a process of wage and price interaction ‘when wages press prices up and prices pull wages up’ called:
A. Inflationary gap B. Deflationary gap C. Inflation spiral D. Seignorage
Explanation: An inflationary situation in an economy which results out of a process of wage and price interaction ‘when wages press prices up and prices pull wages up’ is known as the inflationary spiral. It is also known as the wage-price spiral.