Question

The combination of a successful wage push by workers and the government's commitment to high employment leads to supply-shock inflation. cost-push inflation. demand-pull inflation. supply-side inflation.

Answer 1

The answer is cost-push inflation.

Step-by-step explanation:

Cost-push inflation occurs when inflation increases proportionally to the raw materials (wages) costs. This can only occur when the demand for the products hasn't changed, and the high cost of wages is now passed to the consumers.

Common causes of cost-push inflation include natural disasters or a change in the government's laws.