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Economy - Types, factors and effects of inflation in Malaysia

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accounting
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UUM

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  1. Types of inflation
    1. Creeping Inflation
    2. Walking Inflation
    3. Galloping Inflation
    4. Hyperinflation
    5. Stagflation
    6. Demand-pull inflation
    7. Cost-Push inflation
  2. Factors of inflation
    1. Inflation
    2. Gross Domestic Product
    3. Government Expenditure
    4. Imported Goods and Services
    5. Interest Rate
    6. Money Supply
  3. How to prevent inflation
    1. Contractionary Monetary Policy
    2. Reserve Requirements
    3. Fiscal Policy
    4. Reducing Money Supply
  4. Effects of inflation
    1. Negative inflation
    2. Positive Effect

In the economy, inflation means an increase in the general price of goods and services in an economy from time to time. G. Ackley defined inflation as ?a persistent and appreciable rise in the general level or aver­age of prices'. With the increase in general price levels, each unit of currency can only buy goods and services in lesser quantities than ever before. Therefore, inflation also reflects the decline in purchasing power, which is a loss of real value in internal exchange medium of an economy. High inflation may lead to a shortage of goods when consumers begin hide items because worries about prices will rise in the future.

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