Cost-push inflation is characterized by a(n)
A)increase in aggregate supply and a decrease in aggregate demand.
B)increase in aggregate demand and no change in aggregate supply.
C)decrease in aggregate supply and no change in aggregate demand.
D)decrease in both aggregate supply and aggregate demand.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the overall price level rises due to an increase in the cost of production, leading to a decrease in aggregate supply while aggregate demand remains unchanged.

Cost-Push Inflation Is Characterized by A(n)