Administrative inflation is the tendency of prices, aided by union-corporation contracts, to rise during economic expansion and to resist declines during recessions.

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Administrative inflation occurs when prices rise during economic expansions and are resistant to decline during recessions. This is often aided by union-corporation contracts which may include wage increases and other benefits. As the economy expands, demand for goods and services may increase, leading to higher prices. During recessions, however, supply may exceed demand, but prices may not decrease due to these contracts and other factors such as sticky prices.

Administrative Inflation Is the Tendency of Prices, Aided by Union-Corporation