If the government adopts a "hands off" approach to cost-push inflation in the economy, then in the short run there is likely to be:
A) A rise in real output
B) A fall in unemployment
C) An inflationary spiral
D) A recession

Question

Quizplus · Accepted Answer

A "hands off" approach to cost-push inflation means the government does not intervene to control rising prices. This can lead to reduced consumer purchasing power and decreased demand, potentially resulting in a recession.

If the Government Adopts a "Hands Off" Approach to Cost-Push