Inflation

Inflation can be defined as the tendency of rising prices of goods and services generally held constant due to unequal flow of goods and the flow of money.

From this we can see the condition of a country that is experiencing inflation, namely:

1. Prices of goods in general will rise continuously
2. The money supply exceeds demand
3. Value for money has decreased

In economics, inflation is a process of rising prices in general and continuous associated with the market mechanism can be caused by various factors, among others, increased consumption or a lack launch distribution of goods. In other words, inflation is also a process of decline in currency values on a continuous basis.

Inflation is the process of an event, not the high-low price level. That is, the higher price is not necessarily considered to indicate inflation. Inflation is considered occurs when the price increase took place continuously and mutually interact. The term inflation is also used to mean increased supply of money in what is sometimes seen as a cause of rising prices. There are many ways to measure the rate of inflation, the two most commonly used is the CPI and the GDP deflator.

Inflation can be classified into three groups, namely inflation mild, moderate, severe, and hyperinflation. Mild inflation occurs when prices are below the 10% a year; inflation was between 10% -30% a year; weight between 30% -100% a year; and hyperinflation or uncontrolled inflation occurs when prices rise above 100% a year.