Question

Which factor caused higher oil prices to directly lead to inflation?

Answer 1

Answer:

Companies passed on production and transportation costs to consumers

Explanation:

An increase in oil prices will add to a higher inflation level. This is on the grounds that transport costs will rise prompting more increased prices for many products. This will be cost-push inflation which is very unique to inflation brought about by rising aggregate excess/demand growth.

Consumers will see a decline in unrestricted income. They bear a higher cost of transportation, yet don't have the compensation of income rise. Higher oil costs can prompt slower economic development – especially an issue if consumer spending is less.

Answer 2

Answer:

B.) Companies passed on production and transportation costs to consumers.

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