Inﬂation caused by a rise in the prices of inputs is referred to as
A) cost-push inﬂation.
B) demand-pull inﬂation.
C) unanticipated inﬂation.
D) hyperinﬂation.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the cost of producing goods and services increases, causing a decrease in supply and an increase in prices. This can happen due to a rise in the price of inputs such as labor, raw materials, or energy. Demand-pull inflation, on the other hand, occurs when demand for goods and services exceeds supply, causing prices to rise. Unanticipated inflation refers to unexpected increases in the general price level, while hyperinflation is a rapid and uncontrollable increase in prices.

Inﬂation Caused by a Rise in the Prices of Inputs