Inflation can create many problems during different stages of the economy, making it hard for businesses to grow and for people to feel secure about their money.

1. Boom Phase:

• During this time, things might seem great, but inflation can speed up quickly.
• Companies might make too many products, causing a surplus. Then, they have to make big changes to fix this.
• When prices go up a lot, families may find it hard to pay for things, which can lead to less spending.

2. Recession Phase:

• Even when people are buying less, inflation can still stay high. This leads to something called stagflation.
• Stagflation is when people lose their jobs, but prices keep going up at the same time.
• This makes it really tricky for leaders to help the economy get better without making inflation worse.

3. Recovery Phase:

• If inflation is still high during recovery, it can eat away at savings. This makes people less confident in spending their money.
• When people don’t spend as much, the economy takes longer to get back on its feet.
• One way to tackle inflation is for banks to make borrowing harder. But if they do this, it might slow down growth even more, so they have to be very careful about their choices.