WAEC - Economics (2020 - No. 33)
Inflation may occur if
rate of productivity is higher than the wage rate
prices fluctuate during a particular season of the year
wage increase is granted without an increase in productivity
the government embarks on restrictive monetary policies
Wyjaśnienie
If salaries and wages are increased without a corresponding increase in production, it will lead to inflation. This is so because they will be excess money chasing few the goods that are available in the market.