Chapter 6R, Problem 12MCQ

To determine

To find:

Type of inflation that is caused by increase in the price of an input with economy wide importance.

Explanation of Solution

Cost-push inflation is allegedly a sort of inflation brought on by price rises for significant products or services when no adequate substitute is offered. Businesses are compelled to raise the price of their outputs as a result of increasing input costs. It is compared to the demand-pull inflation hypothesis. Both theories of inflation have been advanced at various points, but there isn't enough data to say which is more accurate.

Thus, from the above we can conclude that the correct option is D.