The main sources of cost-push inflation are increases in
A) the real wage rate and the price of raw materials.
B) the quantity of money and the real wage rate.
C) the money wage rate and aggregate demand.
D) government expenditure and the quantity of money.
E) the money wage rate and the price of raw materials.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the costs of production increase, leading to an increase in the prices of goods and services. The main sources of cost-push inflation include increases in the money wage rate (the cost of labor) and the price of raw materials. These increases raise the cost of production for businesses, which often pass these costs onto consumers in the form of higher prices.

The Main Sources of Cost-Push Inflation Are Increases in