Which of the following will likely lead to cost-push inflation? Select the two correct answers. (1 point)
-An increase in the price of oil has reduced supply of all goods and services that use oil as an input.
-An ongoing war causes government spending to nearly double in quantity.
- A tornado destroys factories and lowers supply levels throughout the economy.
-Exports increase dramatically after a relative drop in price.
- Consumers become more comfortable with debt, increasing their spending as they take on more loans.
The correct answers are:
- An increase in the price of oil has reduced supply of all goods and services that use oil as an input.
- A tornado destroys factories and lowers supply levels throughout the economy.