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JAMB Economics 2007 Question 32

Question 32

Money and Inflation

A persistent rise in the prices of inputs will lead to

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

Answer: C (cost-push inflation)

Explanation

When inputs cost more, producers raise prices to cover their costs; this is cost-push inflation.