4
QuizMultiple Choice

Interactions in the US Economy

Question 4 • EA Academy Civics 9

Which scenario is an example of cost-push inflation?

Answer
A
The cost of purses rises after a store does not stock a large enough supply.
B
The cost of gasoline rises at least once a year to match the cost of living.
C
The cost of sneakers rises after a celebrity recommends them and demand goes up.
D
The cost of cell phones rises after manufacturing them becomes more expensive.

Explanation

Cost-push inflation happens when rising production costs lead businesses to charge more for their products. In choice D, manufacturing cell phones becomes more expensive, so the higher cost of making them pushes up their price. Choice C describes demand-pull inflation, because demand rises after a celebrity recommends the sneakers.

AI-written and checked against the verified answer.

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