8
AssignmentMultiple Choice

4.4 Inflation and Stagflation

Question 8 • * HSA 26-27 Economics

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

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

Explanation

Higher oil prices raise the cost of fuel and other energy used to make and transport goods. Companies often pass those added production and transportation costs on to consumers through higher prices, contributing directly to inflation. Therefore, the correct choice is “Companies passed on production and transportation costs to consumers.”

AI-written and checked against the verified answer.

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