Cost-push inflation occurs when the:
A) price of a key input increases suddenly.
B) price level changes in response to changes in the business cycle.
C) prices of necessity goods increase suddenly.
D) business cycle becomes sporadic and unpredictable.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the price of a key input, such as labor, raw materials or energy, increases suddenly. This increase in production costs leads to higher prices for goods and services in the economy.

Cost-Push Inflation Occurs When The