The Economy Starts Out at a Full-Employment Equilibrium

Multiple Choice

The economy starts out at a full-employment equilibrium. Some events then occur that generate a cost-push inflation. Which of the following events might start a cost-push inflation?

A) a decrease in exports
B) an increase in the quantity of money
C) a decrease in government expenditure
D) an increase in the money wage rate or an increase in the money prices of raw materials
E) an increase in taxes