Which of the following could trigger supply-side inflation?

Question

Quizplus · Accepted Answer

An increase in raw materials' prices would increase the cost of production for firms, leading to an increase in the prices of goods and services. This would result in supply-side inflation, as suppliers would be able to charge higher prices to maintain their profit margins.

Note: A decrease in the wage rate for all workers (Choice A) would lead to a decrease in costs for firms, which could potentially lead to a decrease in prices for goods and services. An increase in productivity of capital (Choice C) would also lead to a decrease in costs for firms, which could potentially lead to a decrease in prices for goods and services. An increase in the labor force (Choice D) could potentially lead to an increase in aggregate supply, which could help to moderate inflationary pressures. However, in and of itself, it would not necessarily trigger supply-side inflation.

Which of the Following Could Trigger Supply-Side Inflation