Which of the following statements is FALSE?
A) Expectations affect demand-pull but not cost-push inflation since price increases come after the goods are produced.
B) Inflation need not come solely from the sellers' or the buyers' side of the market, it can come simultaneously from both sides.
C) Cost-push inflation can result from bargaining power by resource owners, limited resource availabilities, or chance events.
D) Cost-push inflation more likely results when cost increases push up the product prices of large firms or a significant number of smaller firms.

Question

Quizplus · Accepted Answer

Expectations can affect both demand-pull and cost-push inflation. In the case of cost-push inflation, expectations about future price increases can lead firms to raise prices in anticipation, not just after goods are produced.

Which of the Following Statements Is FALSE