Inflation and the Forces that Affect Inflationary Pressures

Inflation
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Inflation
Introduction
The issue of inflation has been an economic problem. Inflation in the economy is characterized by uneven price increases. Inflation increases the prices of products and services, decreasing the purchasing power of customers (Paul et al. 2017). With a constant income in an inflated economy, consumers have limited purchasing powers due to the increased prices and constant incomes, which limit their affordability of goods and services. Inflation pressure affects countries by increasing their risk of regime changes. Pressure from inflation also influences economic problems that lead to the falling in and out of these countries. In the long run, inflation pressure could lead to civil wars and global conflicts. Three crucial factors that affect inflationary pressures include easy monetary policies, controls on the prices of inputs in production, and government spending boosts in demand. This paper will explain how these three forces promote inflationary pressure and how the government used policies in the past to deal with inflation, with a specific focus on the three forces, from the perspective of a fiscal policy advisor. The paper will also provide recommendations on how best to execute economic public policies during inflationary distress. 
How the three Factors Contribute to Inflationary Pressure
Easy Monetary Policy (Low-Interest Rates)
Easy monetary policies such as low-interest rates contribute to inflationary pressures by improving the public’s access to financial resources, which contributes to economic growth and inflation. Economic growth occurs when the cost of living increases in an economy. Economic growth is achieved with increased public access to financial resources (Federal Reserve Bank of San Francisco 2004). Low-interest rates supported by easy monetary policies contribute to inflationary pressure by increasing people’s access to financial support through loans. Increased access to finances increases consumers demand goods and services. The low-interest rates also contribute to more borrowing as people try to keep up with their financial needs. However, as the economy grows from the increased affordability of goods and services by the population, the economy also begins to experience a rise in the inflation rate. Therefore, high easy monetary policies contribute to inflationary pressures by increasing demand for products, thus increasing the rate of inflation in the economy. 
Boost in Demand by Government
Government boosts in demand also contribute to inflationary pressure by increasing the financial abilities of people. With more money to spend, people’s demands increase while their levels of consumption also increase. However, due to the lack of increase in supply, increased demand influenced by boosts from governments contributes to inflationary pressure as it influences suppliers to rise the costs for merchandises and services to handle the increasing demand (Simpson 2014). The increased demand also influences an upsurge in the shortage of highly demanded goods and services, a factor that contributes to inflation pressure. A rightward move of the aggregate demand curve occurs due...