A major factor leading to the supply-side inflation of the middle and late 1970s was the
A) tight money policies carried out by the Fed.
B) presence of considerable slack in the economy.
C) decreases in spending when resources were less than fully employed.
D) significant increases in the prices of important materials (for example, crude oil).
E) the rapid increase in labor productivity in the economy.

Question

Quizplus · Accepted Answer

The significant increases in the prices of important materials, such as crude oil, led to higher input costs for businesses and ultimately increased prices for goods and services, fueling supply-side inflation.

A Major Factor Leading to the Supply-Side Inflation of the Middle