QuestionMay 29, 2025

2. The avian bird flu wipes out large numbers of chickens across the country, forcing farmers to raise the cost of eggs for grocery stores and in turn, the price of eggs for consumers. In this scenario, was inflation was caused by a demand-pull factor or a cost-push factor? Demand Pull Cost Push

2. The avian bird flu wipes out large numbers of chickens across the country, forcing farmers to raise the cost of eggs for grocery stores and in turn, the price of eggs for consumers. In this scenario, was inflation was caused by a demand-pull factor or a cost-push factor? Demand Pull Cost Push
2. The avian bird flu wipes out large numbers of chickens across the country, forcing farmers to raise the cost of eggs for grocery stores and in turn, the price of eggs for consumers. In this scenario, was inflation was caused by a demand-pull factor or a cost-push factor? Demand Pull Cost Push

Solution
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Answer

Cost Push Explanation 1. Identify the Cause of Inflation The scenario describes an increase in production costs due to a decrease in supply (avian bird flu reducing chicken numbers), leading to higher prices. 2. Determine the Type of Inflation Cost-push inflation occurs when production costs rise, causing producers to raise prices. This matches the scenario where egg prices increase due to higher costs for farmers.

Explanation

1. Identify the Cause of Inflation<br /> The scenario describes an increase in production costs due to a decrease in supply (avian bird flu reducing chicken numbers), leading to higher prices.<br /><br />2. Determine the Type of Inflation<br /> Cost-push inflation occurs when production costs rise, causing producers to raise prices. This matches the scenario where egg prices increase due to higher costs for farmers.
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