To prevent cost- push inflation
A) there must not be an excess demand for money.
B) the Fed must not let the quantity of money rise persistently.
C) interest rates must not rise.
D) there must not be an increase in government purchases.

Question

Quizplus · Accepted Answer

Cost-push inflation is caused by a rise in production costs that then leads to higher prices. One way to prevent this type of inflation is to ensure that the quantity of money does not rise persistently, as this can fuel inflationary pressures. By keeping the quantity of money stable, prices will not rise as much and therefore cost-push inflation can be prevented.

To Prevent Cost- Push Inflation