Cost push inflation is likely to arise when
ECONOMICS
WAEC 2016
Cost push inflation is likely to arise when
- A. there is an increase in banking lending
- B. there is an increase in subsidies
- C. stock exchange
- D. rise in the cost of production.
Correct Answer: D. rise in the cost of production.
Explanation
Cost push inflation is inflation caused by an increase in prices of inputs like labour, raw material, etc. The increased price of the factors of production leads to a decreased supply of these goods.
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