At the start of a cost-push inflation,
A)the price level rises and real GDP decreases.
B)the price level rises and real GDP does not change.
C)the price level remains constant and real GDP increases.
D)the price level and real GDP both increase.
E)the price level remains constant and real GDP decreases.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when production costs increase, leading to a rise in prices and a decrease in real GDP due to reduced output.

At the Start of a Cost-Push Inflation