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
The correct answer is: C
Explanation
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.