Which of the following is a supply-side policy that could help reduce cost-push inflation?

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Question

Which of the following is a supply-side policy that could help reduce cost-push inflation?

Accepted Answer

Investing in worker training and education — Award 1 mark for identifying that improved labour productivity reduces unit costs of production, helping control cost-push inflation. A is incorrect — increasing money supply is a monetary policy that may cause demand-pull inflation. B is incorrect — raising minimum wage increases production costs. D is incorrect — transfer payments affect demand, not supply-side costs.

Answer

Increasing government transfer payments

Answer

Raising the minimum wage

Answer

Investing in worker training and education

Answer

Increasing the money supply

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