Cost-push inflation starts with a
A) falling GDP and falling unemployment rate.
B) falling GDP and rising unemployment rate.
C) raising GDP and falling unemployment rate.
D) raising GDP and rising unemployment rate.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when there is a decrease in the supply of goods and services, resulting in an increase in prices. This often happens due to increasing production costs, such as rising wages or the cost of raw materials. As production costs increase, companies must raise their prices to maintain profitability, leading to inflation. This is typically associated with a decrease in GDP and a rise in unemployment, as companies may have to reduce production or lay off workers to manage the increased costs.

Cost-Push Inflation Starts with a