Cost-push inflation can be started by
A)an increase in government expenditure on goods and services.
B)an increase in the money prices of raw materials.
C)a decrease in the money wage rate.
D)a decrease in government expenditure on goods and services.
E)an increase in the quantity of money.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the overall price levels rise due to increases in the cost of wages and raw materials. An increase in the money prices of raw materials can lead to higher production costs, which can then be passed on to consumers in the form of higher prices, thus causing cost-push inflation.

Cost-Push Inflation Can Be Started by