Cost-push inflation starts with a
A) falling GDP and falling unemployment rate.
B) raising GDP and rising unemployment rate.
C) falling GDP and rising unemployment rate.
D) raising GDP and falling unemployment rate.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the cost of production increases, leading to a leftward shift of the aggregate supply curve. This can happen due to factors such as rising energy or labor costs, which can occur during a period of falling GDP and rising unemployment rate. Therefore, the best choice is C, falling GDP and rising unemployment rate.

Cost-Push Inflation Starts with a