PRC-3 · Chapter 18 · Question 25 of 33
A massive global crisis triples the price of crude oil. Manufacturers are forced to radically raise the retail prices of all finished goods to cover these massive new energy costs. This triggers:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Cost-push inflation
Explanation
Cost-push inflation is driven by a decrease in aggregate supply due to a spike in production costs (like expensive imported energy or labor), pushing prices up.
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