Answer to Question #314825 in Macroeconomics for Obed

Question

Will inflation Peter out

Answer 1

 It is a part of of the economic cycle. It can be controlled but not avoided. Governments can use wage and price controls to fight inflation, but that can cause recession and job losses. Similarly, they can also employ a contractionary monetary policy to fight inflation by reducing the money supply within an economy via decreased bond prices and increased interest rates.