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How Does Inflation Affect Household

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Based on the article that I had read, it clearly tell us an information about the risen of inflation level that can affect the household’s living cost in their daily life. What is mean by inflation? According to my research in the Google Chrome, they tell us that inflation is a sustained increase in price level of the good and services in our economy over a period of time. As we know that rising in price of a good is known as an inflation. Our living cost increase are mainly cause by the increasing of the price level. Then what is the meaning of living cost? Living cost means that the cost or certain amount of money that needed to sustain level of living for example, health, food and drinks, shelter and many more. Most of the consumer often making some comparing among a city with another city about their living cost. The more expensive the price of a good and services of the country, the higher the level of living cost. How does the inflation rate can be measured? The inflation rate can be …show more content…

The increasing of the living cost and inflation will hurt the household and they will become poorer and poorer. This will affect the household cannot take their responsibility to take care of their family. The harmful from inflation is become more elusive to make planning on their future life and they are not encourage to make investment and saving. Why household are not encourage to make saving? This is because if the inflation rises, household have to pay more on the interest rate. For example, Ali have RM100 in his saving account with 1% of interest rate. After one year, he has to pay RM101. If the inflation rises and the interest rate rise to 6%, Ali has to pay RM106, this means that he has to pay RM5 more on his saving account’s interest rate and he actually lose some purchasing power. If the inflation keep on rising and his saving didn’t grow, he actually facing losing

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