[Solved] Cost-push inflation is primarily caused by: — Ans: Increase in production costs such as wages and raw materials | Economic Awareness

Economic Awareness - Sectors of Indian Economy

Cost-push inflation is primarily caused by:

AExcess demand in the economy

BIncrease in production costs such as wages and raw materials

CExpansionary monetary policy

DDecrease in aggregate supply due to technological improvements

Step-by-Step Solution

Step 1: Understand cost-push inflation
Cost-push inflation arises when production costs increase, pushing prices up.
Step 2: Analyze options
Excess demand relates to demand-pull inflation. Expansionary monetary policy increases demand, not costs. Technological improvements usually increase supply, reducing inflation.
Final Answer:
Increase in production costs such as wages and raw materials → Option B
Quick Check:
Cost-push inflation = rising production costs ✅

Quick Trick: Cost-push = rising costs push prices up.

Common Mistakes:

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