Cost-push inflation corresponds to ________ output and demand-pull inflation corresponds to ________ output.
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower

Question

Quizplus · Accepted Answer

Cost-push inflation is associated with lower output because higher production costs typically reduce the amount of goods produced. Demand-pull inflation is associated with higher output because it is driven by an increase in demand for goods and services.

Cost-Push Inflation Corresponds to ________ Output and Demand-Pull Inflation Corresponds