Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

An increase in indirect taxes occurs. What effect will this have 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

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