Question

Cost push inflation is the consequence of ______.

Options

• increase in aggregate demand for goods and services

• rise in costs of production

• increase in public expenditure

• increase in population

Answer 1

Cost push inflation is the consequence of rise in costs of production.

Explanation:

Cost-push inflation occurs when manufacturing costs rise, forcing firms to raise prices to maintain profit margins. This could be due to rising wages, higher raw material costs, or higher taxes.