Which of the following could contribute to cost-push inflation?
A)Greater demand for exports
B)Lower income taxes
C)An increase in consumption demand
D)Higher government spending
E)Higher wage demands by trade unions

Question

Quizplus · Accepted Answer

Higher wage demands by trade unions can increase the cost of production for firms, which can lead to increased prices for consumers. This is known as cost-push inflation. The other options listed are more likely to contribute to demand-pull inflation, where demand for goods and services outstrips supply, leading to price increases.

Which of the Following Could Contribute to Cost-Push Inflation