Concept:Cost push inflation occurs when the overall price level rises due to higher production costs.
Explanation:When the cost of inputs such as raw materials, wages, or energy increases, producers face higher expenses.
To maintain profit margins, producers pass these higher costs on to consumers by raising the prices of finished goods.
This increase in the general price level, caused by rising production costs, is called cost push inflation.
An increase in bank lending or subsidies would generally reduce costs or boost demand, not cause cost push inflation.
Answer:Cost push inflation is likely to arise when there is a
rise in the cost of production.
Therefore, the correct option is
D.