Other things being equal, if energy prices rise in a country, then there would be
A) cost-push inflation.
B) demand-pull inflation.
C) cost-push deflation.
D) more production and a lower price level.

Question

Quizplus · Accepted Answer

When energy prices rise, it leads to an increase in the cost of production for businesses that use energy as an input. As a result, these businesses may raise the prices of their products to maintain profitability. This increase in the cost of production and prices is known as cost-push inflation.

Other Things Being Equal, If Energy Prices Rise in a Country