Respuesta :
The inflationary spiral explains the causes and effects of high inflation. The spiral usually begins with an increase in demand. What is the direct effect of this increase in producers raising prices to continue to make profit .
Price spirals are a macroeconomic theory used to explain the causal relationship between rising wages and rising prices or inflation. The price spiral suggests that rising wages will increase disposable income, increase demand for goods, and raise prices.
Higher prices increase the demand for higher wages, leading to higher production costs and further upward pressure on prices, creating a conceptual spiral.
Price Spiral is an economic term that describes the phenomenon of price increases due to rising wages. When workers receive wage increases, they demand more goods and services, which leads to higher prices. Rising wages effectively increase overhead costs, which are passed on to consumers at higher prices. It is essentially a permanent loop or cycle of constant price increases.
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