A general rise in prices caused mainly by higher fuel, wage or raw material costs is called:
Correct answer: B. Cost push inflation
- A. Demand pull inflation
- B. Cost push inflation
- C. Structural deflation
- D. Imported disinflation
Explanation
Cost push inflation occurs when production costs rise and firms pass those costs to consumers. Demand pull inflation instead results from excessive aggregate demand relative to available output.
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About Economy of Pakistan
Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
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