Cost-push inflation is caused by the total demand for goods and services exceeding the economy's capacity to produce those goods.

Question

Quizplus · Accepted Answer

Cost-push inflation is actually caused by an increase in production costs, such as higher wages or raw material prices, which then leads to an increase in prices for goods and services. It is not directly related to total demand exceeding capacity to produce.

Cost-Push Inflation Is Caused by the Total Demand for Goods