Вопрос № 1077843 - Английский язык

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A period of rising prices due to an increase in the cost of production is called cost-push inflation. When, for example, labour unions win wage increases greater than the workers’ increases in productivity, management may choose to raise prices to maintain profits. With prices going up, other unions and workers might demand wage increases to keep up with the increased cost of living, and so on, and so on, in an inflationary spiral. Similarly, efforts by producers to increase profits by increasing prices rather than by reducing costs could also trigger an inflationary spiral.
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What happens when labour unions win wages increases?

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Market Economies
1. In a true market economy the government plays no role in the management of the economy, the government does not intervene in it. The system is based on private enterprise with private ownership of the means of production and private supplies of capital, which can be defined as surplus income available for investment in new business activities. Workers are paid wages by employers according to how skilled they are and how many firms wish to employ them. They spend their wages on the products and services they need. Consumers are willing to spend more on products and services, which are favoured. Firms producing these goods will make more profits and this will persuade more firms to produce these particular goods rather than less favoured ones.
2. Thus, in a market economy consumers decide what is to be produced. Consumers will be willing to pay high prices for products they particularly desire. Firms, which are privately owned, see the opportunity of increased profits and produce the new fashionable and favoured products.
3. Such a system is, at first view, very attractive. The economy adjusts automatically to meet changing demands. No planners have to be employed, which allows more resources to be available for production. Firms tend to be highly competitive in such an environment. New advanced products and low prices are good ways to increase sales and profits. Since all firms are privately owned they try to make the largest profits possible.
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