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leather costs. Cyclical unemployment causing cost-push inflation, moreover stacking
economic downturn, countered by the government adjusting it by changing interest
rates, money supply, foreign currency and government spending.
Government, on the other hand, benefits by removing debt-burdens, negotiates
foreign loans by checking aider’s conditions, through IMF (International Monetary
Fund), furthermore increasing aggregate demand as people spend desperately to
accumulate maximum goods in exchange for descending purchasing power parity
accompanied with lower living standards. This causes imports to rise, leaving a
negative net exports, as people are over-dependent upon imported products being
marginally cost efficient in contrast to the locally produced goods and services due to
inflation.
In conclusion, inflation has a differing sequel depending upon the real income earned
and classification of goods, purchasing power and involvement of government’s
monetary and fiscal policy measures. Henceforth, inflation’s pervasive effects
stresses towards careful consideration in policy-making and financial planning.