World food prices reach new peak since July 2011

Discuss the major causes of inflation in an economy? What can a government do to control inflation? (250 words)

Approach:

Introduce by describing the phenomenon of inflation and its effects
Elaborate on demand-pull and supply-push inflation, giving examples
Discuss the major reasons for an inflation in India - i.e food inflation, crude oil price rise, etc.
Discuss tools of fiscal and monetary policy available with the government to deal with inflation
Conclusion