__________ refers to a situation where prices persistently rise because of growing factor costs.

Demand pull inflation

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Cost push inflation

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Stagflation

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Deflation

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Solution

The correct option is B Cost push inflation
Cost push inflation is an economic situation where the general price level in the economy for all the relevant goods and services has a constant appreciable rise over a considerable period of time due to continuous rise in the factor cost of the commodities in the economy. In other words, it is due to these costs that the price of the commodities are pushed upwards.

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Similar questions

List - I (Type of Inflation)	List - II (Characteristic)
A. Demand-pull Inflation	1. Initially price rises
B. Cost-push Inflation	2. Price-rise controlled by rationing and other means
C. Suppressed Inflation	3. Inflation in which prices increase as a result of increased production costs, as labour and raw materials, even when demand remains the same
D. Creeping Inflation	4. Inflation in which rising demand results in a rise in prices. 5. Fall in price of raw materials

If a fall in the price by 25 percent leads to a rise in demand by only 10 percent leads, the situation is called a/an

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