Question

The spiral usually begins with an increase in demand. what is the direct effect of this increase?

Answer 1

Answer;

Producers raise prices to continue making profit

Explanation;

-Inflationary spiral refers to a situation where there is a  continuous increase in prices which is sustained by the tendency of wage increases and cost increases to react on each other.

-The spiral usually begins with an increase in demand. The direct effect of this increase is that the producers (of commodities) raise prices to continue to make a profit. It usually begins with a rise in production costs.

Answer 2

The spiral usually begins with an increase in demand. The direct effect of this increase is that the producers (of commodities) raise prices to continue to make a profit. It usually begins with a rise in production costs.