To prevent cost-push inflation
A) there must not be an excess demand for money.
B) interest rates must not rise.
C) there must not be an increase in government purchases.
D) the Fed must not let the quantity of money rise persistently.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the overall price level rises due to increases in the cost of wages and raw materials. By not allowing the quantity of money to rise persistently, the Fed can help prevent inflationary pressures from escalating.

To Prevent Cost-Push Inflation