If OPEC raises the price of oil and production costs increase,this may cause

Question

Quizplus · Accepted Answer

When OPEC raises the price of oil, it leads to an increase in production costs for many industries that rely on oil to manufacture their products. As a result, these industries may increase the prices of their goods and services to cover their rising production costs. This creates a situation where the general price level in the economy increases due to an increase in production costs. This type of inflation is known as cost-push inflation. Therefore, the best choice is A.

If OPEC Raises the Price of Oil and Production Costs