Cost-push inflation results directly from a(n):
A)decrease in per unit production costs that shift the short-run aggregate supply curve to the right.
B)increase in per unit production costs that shift the short-run aggregate supply curve to the left
C)increase in government spending.
D)decrease in government regulation.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when there is an increase in per unit production costs that shifts the short-run aggregate supply curve to the left, resulting in higher prices for goods and services. This can be caused by factors such as an increase in the cost of raw materials or an increase in wages for workers. Therefore, option B is the correct answer. Option A describes a situation of a shift to the right in the short-run aggregate supply curve, which would result in lower prices, and options C and D are not directly related to cost-push inflation.

Cost-Push Inflation Results Directly from A(n)