During the 1970s, inflation occurred because OPEC increased oil prices.Which term is used to refer to the inflation experienced at this time?
A) demand-pull inflation
B) hyperinflation
C) cost-push inflation
D) cyclical inflation

Question

During the 1970s, inflation occurred because OPEC increased oil prices.Which term is used to refer to the inflation experienced at this time?  
A) demand-pull inflation 
B) hyperinflation 
C) cost-push inflation 
D) cyclical inflation

Quizplus · Accepted Answer

Cost-push inflation occurs when the cost of production increases, which leads to higher prices for consumers. In this case, the increase in oil prices by OPEC caused a decrease in the supply of oil, which increased production costs for businesses that relied on oil or transportation. This led to higher prices for goods and services, resulting in cost-push inflation.

During the 1970s, Inflation Occurred Because OPEC Increased Oil Prices