How does government spending influence inflation control when combined with demand management strategies and monetary policy adjustments?

Government spending can significantly influence inflation control when it works alongside demand management strategies and monetary policy adjustments. When the government increases its spending, it can boost overall demand in the economy, leading to more jobs and higher consumer spending. However, if this demand grows too quickly, it can cause prices to rise, resulting in inflation. To counteract this, central banks may adjust monetary policy, such as raising interest rates, to make borrowing more expensive and reduce spending. For example, if a government invests in infrastructure projects, it stimulates the economy, but if inflation rises too high, the central bank might increase interest rates to keep prices stable.