Inflation initiated by increases in wages or other resource prices is labelled:
A)demand-pull inflation.
B)demand-push inflation.
C)cost-push inflation.
D)cost-pull inflation.

Question

Quizplus · Accepted Answer

Inflation initiated by increases in wages or other resource prices is labelled as cost-push inflation. This type of inflation occurs due to a decrease in aggregate supply caused by an increase in the cost of production. As a result, prices of goods and services rise due to the reduced supply.

Inflation Initiated by Increases in Wages or Other Resource Prices