During the 1970s, the Organization of Petroleum Exporting Countries (OPEC) sharply increased the price of oil which triggered higher inflation rates in Australia. This type of inflation is best classified as:
A) pseudo-inflation.
B) demand-pull inflation.
C) cost-push inflation.
D) hyperinflation.

Question

Quizplus · Accepted Answer

The increased oil prices caused a rise in the cost of production for many industries, leading to an increase in the prices of goods and services. This type of inflation caused by an increase in production costs is known as cost-push inflation.