The main sources of cost-push inflation are increases in
A)the money wage rate and the price of raw materials.
B)the real wage rate and the price of raw materials.
C)the money wage rate and aggregate demand.
D)the quantity of money and the real wage rate.
E)government expenditure and the quantity of money.

Question

Quizplus · Accepted Answer

The money wage rate and the price of raw materials are the main sources of cost-push inflation as they directly increase the cost of production for firms, leading to an increase in prices. Other factors such as changes in the real wage rate or government expenditure may indirectly affect production costs, but they are not direct sources of cost-push inflation. The quantity of money can also contribute to inflation, but it is a demand-pull factor rather than a cost-push factor.

The Main Sources of Cost-Push Inflation Are Increases in