Identify & explain the type of inflation that might occur if the govn of a country were to tighten its policy?

Question

Identify & explain the type of inflation that might occur if the government of a country were to tighten its policy on foreign workers.

Answer 1

The type of inflation is called "Cost-Push Inflation."

Easy economical equation: Cost-Push Inflation --> Production Cost goes up = Price of goods goes up.

If the government tightens policy on foreign workers, many corporations will have to raise their wages paid to its employees. This will cause an increase in the cost of production for the company, and because of it, the company is forced to increase prices of the goods that they are selling; which of course, will affect us, the consumers.

A main reason that the U.S is not that crazy about controlling its borders, its because many corporations need the low labor cost offered by these foreign individuals, that is, the U.S is controlling inflation. Also, remember that China is the higher exporter of goods to the U.S because of its cheap labor (approximately 9.5% of GDP growth).

Answer 2

identify - cost push inflation to the current and future employers.
demand pull inflation as the local talents now know that they are now being supported by the gov to demand better pay.

explain - via expensive taxes & duties to import new workers, higher cost to deport back the existing "non-qualified" workers Cost of finding new locals to take up the now vacated jobs, higher minimum wages usually assoc. with local talents, cost of re-training non-skilled local workers.

With stricter criteria also, only skilled talents could be imported, therefore they would demand for better pay.

all that contribute to increasing cost to employers, hence.

demand pull - the skilled few local talents are now blessed with a lot of demand to fill the void left via the leaving of the foreign talents. classic demand / supply.

peace

Answer 3

it sounds to me like you're asking people to do your homework for you. why don't you try it yourself for a change, and maybe you'll learn something?