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Inflation In Malaysia Case Study

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Factors Inflation in Malaysia past 3 years Inflation is known as macroeconomic problem. Inflation means a situation that is sustainable keep rising in the general level of price for a basket of goods and services from year to year in Malaysia. It is measured as an annual percentage increase. Inflation is harmful because inflation brings negative impact to a nation. When inflation happens, the real value of money will decrease. Real value of money decreases means our cost of living will increase. Rises in cost of living will cause poorer household suffer more. Therefore, Malaysians become poorer because the money income is not enough for them for purchasing goods and services. Real value of money drops is a serious matter because the purchasing power of Malaysians wills decreases. For example, the price of NIKE shoes is cost RM 99.95 in 6 May 2015.After the inflation, the price of gold cost RM 101.76 in 1 June 2015.From this situation, we realize that we could not use the same price to purchase the same goods anymore and the goods has become expensive …show more content…

Rising in the cost of production such as material costs will always be pushed one level down. When cost of production increases, they will increasing the prices of goods and sold it to the next level to maintain their profit. For example, retailer will increase the prices of goods and sold it to the end user. Price-inflation is cause by rise in labor cost and material costs. This becomes the burden of the producer to produce their product. When the cost of production rises, the productivity will decline because the increases cost of product make them unable to produce more. For example, cost of production to produce the petrol increases and which increase in price level will cause cost-pull inflation. The consumer forced to pay for the higher prices because the seller includes the tax in the price of goods

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