That is spending increases faster than production, will cause the average level of prices to rise. The rest will be that rising prices ration the goods and services. Suppliers who want to increase their profit margins faster than their cost increase create profit- push pressures by rising prices. That is supply shocks may happen as a result of unexpected increases in the price of raw material. Wage- push pressures as a result of labor unions and workers who are able to increase their wages faster than their productivity.
Individuals can protect themselves from inflation if it is anticipated.
The problem is that both anticipated and unanticipated can not be calculated. The real rate of interest can be positive, negative or zero. Fixed income groups will be hurt because their nominal income does not rise in inflationary times, for example, private pension, families living on fixed welfare. Note that the U.S. has indexed social security benefits, which means that these payments increase when consumer price index increases. Therefore, they borrowed dear money and are paying back cheap dollars that have less purchasing power.