Other things equal, cost-push inflation results in output ________ and the price level ________.
A) increasing; increasing
B) increasing; decreasing
C) decreasing; increasing
D) decreasing; decreasing

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the costs of production increase, leading to a decrease in output (as it becomes more expensive to produce goods and services) and an increase in the price level (as the higher costs are passed on to consumers).

Other Things Equal, Cost-Push Inflation Results in Output ________ and the Price