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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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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