What are the primary effects of cost-push inflation?
A)It raises real output and redistributes an increased level of real income.
B)It reduces real output and redistributes a decreased level of real income.
C)It raises real output but redistributes a decreased level of real income.
D)It reduces real output but redistributes an increased level of real income.

Question

Quizplus · Accepted Answer

Cost-push inflation typically results in reduced real output and a redistribution of income, often decreasing the overall level of real income as production costs rise, leading to higher prices and potentially lower demand.

What Are the Primary Effects of Cost-Push Inflation