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Final answer:

Cost-push inflation results from increased production costs, causing reduced supply and higher prices.


Explanation:

Cost-push inflation occurs when there is an increase in the costs of production, leading to a decrease in the supply of goods and a rise in prices. This differs from demand-pull inflation, which is caused by an increase in aggregate demand.

One major reason for cost-push inflation is supply shocks, such as the oil crisis of the 1970s, where sudden changes in the price of a key commodity led to higher production costs and price levels.


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