When a cost- push inflation starts
A)the price level rises and real GDP decreases.
B)the price level falls and the money wages rises.
C)the short- run aggregate supply curve shifts rightward.
D)real GDP rises faster than the quantity of money.

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, leading to a decrease in real GDP as production becomes more expensive and output declines.

When a Cost- Push Inflation Starts