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    Question

     In the case of cost-push inflation, other things being equal:

    A both the inflation rate and the unemployment rate rise at the same time. Correct Answer Incorrect Answer
    B the unemployment rate rises but the inflation rate falls. Correct Answer Incorrect Answer
    C the inflation rate rises but the unemployment rate falls. Correct Answer Incorrect Answer
    D both the inflation rate and the unemployment rate fall. Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    In the case of cost-push inflation, other things being equal the inflation rate rises but the unemployment rate falls.

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