Introduction

The discussion is focuses on “Inflation”. It also includes the Types of Inflation,

Causes of Inflation, Effects of Inflation, Different Information and Inflation Rate.

Analysis
Inflation is defined as a sustained increase in the price level or a fall in the value of
money. When the level of currency of a country exceeds the level of production,
inflation occurs.Value of money depreciates with the occurrence of inflation. In
economics, the word inflation refers to general rise in prices measured against a
standard level of purchasing power. According to CROWTHER, “Inflation is state in
which the value of money is falling and the prices are rising.” Types of inflation are,
Creeping Inflation is defined as the circumstance where the inflation of a nation
increases gradually, but continually, over time. Walking Inflation In this case, the
inflation rate falls between 3% to 10%. It is a warning signal for the government to
control it before it turns into running inflation. Galloping Inflation is a type of inflation
that occurs when the prices of goods and services increases at two-digit or three-digit
rate per annum. Galloping inflation is also know as jumping inflation. Hyperinflation is
a term to describe rapid, excessive, and out-of-control price increases in an economy.
Causes of Inflation, Demand-pull inflation aggregate demand growing faster than
aggregate supply (growth too rapid). Cost-push inflation higher prices feeding through
into higher costs. The Money Supply inflation is primarily caused by an increase in the
money supply that outpaces economic growth.
Effects of inflation, positive effects are, raises the cost of borrowing, Increases growth,
Reduces unemployment, Positive on the part of businesses. Negative effects are,
reduces purchasing power, Encourages spending, Higher taxes, Lower the savings, It
hurts the creditor.

Conclusion
After the discussion above I have realize that inflation has a major impacts in the
economy of the country, it has a positive impacts and negative impacts the negative
impacts that can be affect the inflation are, once the inflation rate gets high it tend to
cause less investment. And higher inflation leads to lower international
competitiveness, leading to fewer exports. It also can reduce the real value of savings.
And the positive impacts of inflation are, once the inflation decreases it can lead to
lower consumer spending and lower growth. And it reduces the real value of debt.
Moderate rates inflation allow prices to adjust and goods attain their real price