Which of the following is an example of cost- push inflation?
A) Taxes are continuously decreased over a period of time.
B) Export demand for domestic goods increases continually.
C) Firms with market power use this power to constantly increase prices.
D) Government expenditure increases continuously over a period of time.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the overall price level rises due to increases in the cost of wages and raw materials. Firms with market power increasing prices can lead to higher production costs, contributing to cost-push inflation.

Which of the Following Is an Example of Cost- Push