Question

Which of the following is NOT a cause of Cost Push Inflation?

• A. Increased prices
• B. Rise in population
• C. Fluctuations in output and supply
• D. External factors

Hint:

Cost-push inflation is driven by increased production costs, while demand-pull inflation is driven by an increase in aggregate demand.

Answer 1

The Correct Option is B

Cost-push inflation occurs when the cost of production increases, leading to higher prices for goods and services. This can happen due to factors such as increased prices of raw materials (increased prices), fluctuations in output and supply, and external factors like an increase in oil prices. However, a rise in population does not directly cause cost-push inflation.

Final Answer: (B) Rise in population.