Suppose rubber prices rise in international markets. For countries that import rubber, this scenario would lead to:

Question

Quizplus · Accepted Answer

An increase in rubber prices in international markets would lead to an increase in the cost of production for firms that use rubber as an input. This increase in production costs leads to higher prices for goods and services, which is known as cost-push inflation. Therefore, choice A is the correct option.

Suppose Rubber Prices Rise in International Markets