What is referred by cost push inflation ?
Correct answer: D. increased production costs drive prices up
- A. Decreased production costs drive prices up
- B. Decreased production costs drive prices down
- C. increased production costs drive prices down
- D. increased production costs drive prices up
Explanation
Cost-push inflation begins when wages, raw materials, energy, or other production costs increase, causing firms to raise prices. Thus, increased production costs drive prices up.
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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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