Question

Which factor caused higher oil prices to directly lead to inflation?

It increased demand for cars, leading to higher automobile prices.
Companies passed on production and transportation costs to consumers
The government began to print more money.
O Gas prices declined too quickly, leading to oversupply

Answer 1

B.) Companies passed on production and transportation costs to consumers.

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Answer 2

Companies passed on production and transportation costs to consumers

Step-by-step explanation:

An increase in oil prices will add to a higher inflation level. This is on the grounds that transport costs will rise prompting more increased prices for many products. This will be cost-push inflation which is very unique to inflation brought about by rising aggregate excess/demand growth.

Consumers will see a decline in unrestricted income. They bear a higher cost of transportation, yet don't have the compensation of income rise. Higher oil costs can prompt slower economic development – especially an issue if consumer spending is less.