Cost-push inflation can result from an initial
A)decrease in personal income taxes.
B)increase in personal income taxes.
C)increase in government expenditure.
D)increase in the money wage rate.
E)increase in transfer payments.

Question

Quizplus · Accepted Answer

An increase in the money wage rate means firms have to pay more to their employees, resulting in higher production costs. This leads to cost-push inflation.

Cost-Push Inflation Can Result from an Initial