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JAMB Economics 1999 Question 37

Question 37

Money and Inflation

Inflation which is caused mainly by increases in the prices of factors of production is described as

  1. A.cost-push inflation
  2. B.demand-pull inflation
  3. C.crawling inflation
  4. D.spiral inflation.
Show the answer and explanation

Answer: A (cost-push inflation)

Explanation

When wages, raw materials and other input costs rise, producers raise their prices: cost-push inflation.