Question

Higher consumer prices are likely to be accompanied by:

A. lower union wages.

B. lower interest rates.

C. lower production costs.

D. higher interest rates.

Answer 1

Higher interest rates.
Higher interest rates will increase the firm's cost of raising capital.This will lead to low production or production at higher cost.That's why consumer prices will be high.

Answer 2

Higher consumer prices are likely to be accompanied by higher interest rates, inflation, an increase in real wages, or a decrease in consumption.