A persistent increase in the general price level caused by higher production costs is called
Correct answer: B. Cost-push inflation
- A. Demand-pull inflation
- B. Cost-push inflation
- C. Disinflation
- D. Deflation
Explanation
Cost-push inflation results when input costs, such as wages or energy prices, rise and shift aggregate supply leftward. Demand-pull inflation arises from excessive aggregate demand rather than rising production costs.
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