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WAEC Economics 2011 Question 40

Question 40

Money and Inflation

Cost push inflation is caused by a

  1. A.rise in the cost of production.
  2. B.decrease in the transportation cost.
  3. C.rise in demand for goods.
  4. D.decrease in the cost of production.
Show the answer and explanation

Answer: A (rise in the cost of production.)

Explanation

When production costs rise, firms push up prices: cost-push inflation.