Cost-push inﬂation may be caused by
A) a decline in per-unit production costs.
B) a decrease in wage rates.
C) a negative supply shock.
D) an increase in resource availability.

Question

Quizplus · Accepted Answer

Cost-push inflation is caused by an increase in the cost of production, which is typically caused by a negative supply shock. This means that there is a decrease in the supply of goods or an increase in the cost of producing them, which leads to higher prices for consumers. The other options (A, B, and D) would actually lead to a decrease in costs and, therefore, a decrease in inflation.

Cost-Push Inﬂation May Be Caused by