Day: July 29, 2019

Which of the following is a cause of cost-push inflation?

Select ONE answer:

1. an increase in bank lending
2. an increase in a budget deficit
3. an increase in the price of raw materials
4. an increase in the value of exports sold

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

1. A cause of demand-pull inflation.
2. A cause of demand-pull inflation.
3. Correct: An increase in the price of raw materials would raise firms’ costs of production.
4. A cause of demand-pull inflation.

 

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