Question

What scenario is an example of cost-push inflation?

Answer 1

The typical scenario is an economy in which the cost of raw materials and that of wages pushes up the price levels, thus producing inflation.

Answer 2

Answer: The correct answer is : Increasing the salary of workers also increases the cost of car production and as a consequence also increases the price of cars, which produces inflation.

Cost inflation occurs when supply costs increase and prices rise as long as demand remains the same.