Inflation that is driven by the rising cost of inputs including wages and salaries is called
A) demand-pull inflation.
B) cost push inflation
C) stagflation.
D) profit push inflation

Question

Quizplus · Accepted Answer

Cost-push inflation is caused by an increase in the cost of production, including wages and salaries, which leads to a decrease in supply and an increase in prices. This type of inflation is also known as supply-side inflation. Demand-pull inflation is caused by an increase in aggregate demand, while stagflation refers to a situation where the economy experiences both high inflation and high unemployment. Profit-push inflation is not a commonly used term in economics.

Inflation That Is Driven by the Rising Cost of Inputs