Inflation often occurs as a result of increased domestic demand, leading to a rise in prices and production, and there are two main ways to reduce domestic demand in order to reduce inflation. These are:

Monetary policy: Raising interest rates encourages people to save money instead of spending it, leading to lower demand levels and lower production. High-interest rates also make it difficult for people and businesses to borrow and take out loans, so these factors drive down demand, causing inflation to decline. Value.

Fiscal Policy: By reducing government spending in the economy and increasing taxes, people do not have more money to spend in the economy, resulting in a decrease in demand, and consequently a decrease in the level of inflation.

Therefore, a country can control its inflation level through both policies that can help reduce or increase the inflation level in the country.