When there is a cost-push inflation,
A) workers demand higher money wages because of the inflation.
B) the aggregate demand curve shifts leftward because of the cost hikes.
C) the short-run aggregate supply curve shifts rightward.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the costs of production increase, leading to a decrease in the supply of goods and services. As a result, workers may demand higher wages to keep up with the rising cost of living, which is consistent with option A.

When There Is a Cost-Push Inflation