Cost-push inflation might start with
A) a fall in the prices of raw materials.
B) an increase in the quantity of money.
C) an increase in government expenditures.
D) a rise in money wage rates.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs due to an increase in the cost of production, which leads to a decrease in the supply of goods and services. One of the main reasons for cost-push inflation is an increase in the money wage rate, which raises the cost of production and forces firms to increase prices. Therefore, the best choice is D, a rise in money wage rates.

Cost-Push Inflation Might Start with