What is a common effect of cost-push inflation?

Cost-push inflation occurs when the overall prices rise due to increases in the costs of production, such as wages and raw materials. When production costs rise, businesses may be unable to maintain the same level of output, leading to a decrease in the supply of goods and services available in the market. This reduction in supply, combined with steady or heightened demand, further exacerbates inflation as consumers are willing to pay more for the limited goods available.

In contrast, choices that suggest an increase in consumer saving rates, a decrease in production costs, or an increase in consumer spending do not align with the fundamental principles of cost-push inflation. Typically, when prices are rising due to increased costs, consumers may actually reduce spending due to higher prices, and there is not usually a simultaneous increase in savings in response to rising costs.