Cost-push inflation may be caused by:
A)a decline in per-unit production costs
B)a decrease in wage rates
C)higher raw material prices
D)an increase in resource availability
E)higher spending

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when there is an increase in production costs, including raw material prices, which leads to an increase in the prices of goods and services. Therefore, a higher raw material cost is the best choice among the given options. The decline in per-unit production costs, decrease in wage rates, and an increase in resource availability would result in a decrease in prices, which is the opposite of cost-push inflation. Higher spending can lead to demand-pull inflation but not cost-push inflation.

Cost-Push Inflation May Be Caused By