On March 26th, the cargo ship Dali lost power and collided with the Francis Scott Key Bridge near Baltimore, MD.
Aside from the tragic deaths of some construction workers on the bridge, this accident shut down the Port of Baltimore, the 11th largest port in our country. Some $60 billion in goods move through the Port of Baltimore annually, but all of that activity has stopped because the collapsed bridge has made it impossible for ships to get to the port. It is unknown how long it will take to make the Port of Baltimore accessible again.
For your Unit 6 Sample work, answer this question:
If this accident were to cause inflation, which kind of inflation would it be?
A Global inflation
B Cost-push inflation
C Demand-pull inflation
D GDP inflation
B Cost-push inflation
Cost-push inflation occurs when the cost of production increases, leading to an increase in prices for goods and services. In this case, the accident that shut down the Port of Baltimore would disrupt the supply chain and transportation of goods, leading to increased costs for businesses. This could potentially lead to cost-push inflation as companies pass on these higher costs to consumers in the form of higher prices.