Cost- push inflation might start to occur if the
A) money wage rate decreases.
B) quantity of money decreases.
C) money wage rate increases.
D) government increases its expenditure.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the cost of production increases, such as when wages increase. Therefore, if the money wage rate increases, it would cause an increase in the cost of production and lead to cost-push inflation. Decreases in the quantity of money (B) and government expenditure (D) would typically cause deflationary pressures, while a decrease in the money wage rate (A) would reduce the cost of production and also lead to deflationary pressures.

Cost- Push Inflation Might Start to Occur If the