Which of the following would be expected to cause a an increase in the inflation rate rather than a once-and-for-all increase in the price level?

Question

Quizplus · Accepted Answer

Expectations of higher future inflation can lead to an increase in the inflation rate as consumers and producers adjust their behavior accordingly. Increases in taxes or costs, such as options A, C, and E, may lead to a temporary increase in prices, but not necessarily a sustained increase in the inflation rate. Option B may cause a one-time increase in prices, but again, not necessarily a sustained increase in the inflation rate.

Which of the Following Would Be Expected to Cause a an Increase