If OPEC raises the price of oil and production costs increase,this may cause
A)Cost-push inflation.
B)Demand-pull inflation.
C)Hyperinflation.
D)Super-pull inflation.

Question

Quizplus · Accepted Answer

If OPEC raises the price of oil and production costs increase, it will result in cost-push inflation. This is because the cost of production for goods and services that require energy will increase, which will lead to an increase in the price of those goods and services. As a result, this can lead to a decrease in the purchasing power of consumers and a rise in the overall price level in the economy.

If OPEC Raises the Price of Oil and Production Costs