Concept:Inflation is a sustained rise in the general price level, often caused by higher production costs or excess money in the economy.
Explanation:Wages are a major cost of production for businesses.
When wages increase, firms spend more on labour.
To protect their profit, firms raise the prices of their goods and services.
This leads to cost-push inflation.
Higher taxes reduce disposable income, so demand and prices tend to fall.
Increased unemployment weakens purchasing power, which lowers demand.
A budget surplus means the government withdraws more money than it spends, reducing aggregate demand.
Therefore, only a rise in wages directly pushes the general price level upward.
Answer:D. wages increase