A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Oct/Nov 2021 · Q241 Mark
There is an increase in indirect taxes. What will be the impact on demand-pull inflation and on cost-push inflation?
Ademand-pull inflation: fall; cost-push inflation: fall
Bdemand-pull inflation: fall; cost-push inflation: rise
Cdemand-pull inflation: rise; cost-push inflation: fall
Ddemand-pull inflation: rise; cost-push inflation: rise
✓ Correct answer
B: demand-pull inflation: fall; cost-push inflation: rise
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