Cost-push inflation could be explained by:
A)an increase in the level of consumer spending.
B)a decrease in wage rates.
C)a decline in per-unit production costs.
D)an increase in the per-unit production cost.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when there is an increase in the per-unit production cost, such as an increase in the cost of raw materials or labor costs. This increase in production costs leads to an increase in the prices of goods and services, resulting in inflation. Options A and B are incorrect, as they describe factors that could lead to demand-pull inflation. Option C is also incorrect, as a decline in per-unit production costs would actually lead to a decrease in prices and deflation.

Cost-Push Inflation Could Be Explained By