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    Question

    Which of the following factors is likely to lead to

    cost-push inflation?
    A Decreased government spending Correct Answer Incorrect Answer
    B A decrease in oil prices Correct Answer Incorrect Answer
    C Technological advancements that increase productivity Correct Answer Incorrect Answer
    D An increase in wages Correct Answer Incorrect Answer
    E A decrease in consumer spending Correct Answer Incorrect Answer

    Solution

    Cost-push inflation occurs when there is an increase in production costs, such as wages, that leads to higher prices for goods and services. When wages rise, businesses may pass on these increased costs to consumers by raising prices, thereby contributing to inflationary pressures in the economy.

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