tugas soft skill bahasa inggris bisnis 1 riantono p (20207922)

INFLATION

Inflation Definition
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
TYPE-KIND INFLATION
From the above description we can conclude that inflation is happening in a country of different kinds. This depends on the cause. Inflation is divided into:
a. According to the severity or the rate of inflation, including:
1) Inflation Lightweight (CreepingInflation)
Inflation level is still below 10% a year
2) Inflation Medium
Inflation level lies between 10% - 30% a year
3) Inflation Weight
Inflation level lies between 30% - 100% a year
4) hyperinflation
Severity level of inflation is above 100%


Based on the incidence of inflation
- Inflation that comes from the domestic (domestic inflation), inflation was caused by state budget deficit and the resulting failure of the market price of basic needs to be expensive.
- Inflation comes from abroad (imported inflation), occurs because the increase in prices of goods in other countries, the production cost of foreign goods is high, the increase rate of imports of goods






3. Based on the causes of the emergence of inflation, can be classified:
a. Pull demand (demand pull inflation)
This inflation occurs because the aggregate demand all kinds of things will continue to increase, for example:
- Increase in government spending financed by printing new money
- Increase in private investment spending because of the ease of bank credit
b. Pressure cost (cost push inflation)
This inflation caused by rising production costs, usually beginning with:
- Increase in production costs, such as wage increases, rising prices of capital
- Reduction in the number of bidding
- Rising prices coupled with decreasing number of production
c. Inflation mixture, due to a combination of elements and pull inflation cost-push inflation.
d. Imported inflation, due to the influence of foreign inflation and the existence of trade between countries.
For example: a country experiencing inflation, then the production of these countries
required by other countries and imported, the price of these goods increased.

Impact of Inflation
Impact of inflation on the economy that will ultimately affect the level of community prosperity, following the negative impact of inflation:
1. Distribution of income there are parties affected, including:
a. Inflation would be detrimental to their fixed income, such as civil servants. For example, the amir of a public servant being paid Rp. 60,000,000 a year and 10% inflation rate. When Amir income has not changed, then it will decline in real income by 10% x Rp. 60,000,000 = Rp. 6,000,000.
b. Losses will be experienced for those who keep wealth in the form of cash.
c. Losses will be experienced by creditors, if the interest rate provided the loan is lower than inflation.
On the other hand there are beneficiaries of inflation:
- The percentage of income that exceeds the percentage increase in inflation
- Those who have wealth is not in cash but in goods or gold.
2. Impact on efficiency, impact on:
- The production process in the use of production factors to be inefficient in time of inflation
- Changes in people's purchasing power to affect the structure of public demand for some types of goods
3. Impact of inflation on output (production):
- Inflation can cause an increase in production. Usually in a state of inflation of goods prices will precede the increase in salary, it is profitable producers
- If the rate of inflation is too high will result in decrease of production yield, because the real value of money will fall and people are not happy to have the cash, as a result of exchange between goods carried by goods.
4. Effects of inflation against unemployment
A country that tried to stop the high inflation rate, meaning at the same time would create unemployment.



HOW TO OVERCOME INFLATION
Efforts to overcome inflation should start from the causes of inflation in order to find a way out. Theoretically to cope with inflation is relatively easy, in particular by overcoming the main base, reducing the amount of money in circulation.
The following policies are expected to tackle inflation:
1. Monetary policy, all government policies in the monetary field with the aim of maintaining monetary stability to improve the welfare of the people.
These policies include:
a. Politics discounts, by reducing the money supply by raising interest rates, it is expected the demand for credit will be reduced.
b. Open market operations, reducing the money supply by selling SBI
c. Increase cash reserves, so the money is distributed by commercial banks to be reduced
d. Selective credit, central bank policy to reduce the amount of money in circulation by means of granting credit
e. Politics sanering, this is done when it happened hyper inflation, BI was never done on December 13, 1965 which cut the money from Rp.1.000 be Rp.1


2. Fiscal Policy, can be done by:
a. raise tax rates, expected by society to deposit some more money to the government as tax payments, thus reducing the amount of money in circulation.
b. Organize government revenues and expenditures
c. Conducting government loans, such as cutting government civil servant salaries 10% for savings, this happened during the old order.

3. Non-Monetary Policy, can be done through:
a. Increase production, the Government provides subsidies to the industry to be more productive and produce more output, so the price will be down.
b. Wage policy, the government appealed to unions not to ask for a raise while being inflation.
c. Supervision prices, government policies to determine the maximum prices for certain goods.
4. GOVERNMENT POLICY IN COPING WITH INFLATION
Discussion until the effects of inflation, then I can conclude that inflation causes the vast changes in the economic activities of society. While connected to the current situation of course you easily get the negative symptoms of the simplest inflation, prices rose as a whole. Do you feel the impact?
Inflation must be overcome and to overcome it can be done by government policy concerning several areas of monetary, fiscal and non-monetary. The explanation of these policies will be outlined below.
a. Monetary policy is a policy that aims to increase national income by changing the amount of money in circulation. The cause of inflation between the money supply too much, so with these policies is expected amount of money in circulation can be reduced to normal conditions. To carry out this policy of Bank Indonesia to execute some political / policy ie policy discounts, open market policy and raised the cash ratio.
1) Political Discount intended to raise interest rates because the interest rate is high, the economic activity that uses the loan funds will be captured for the loan capital to be expensive.
2) Political Open Market is done by offering securities to capital markets. In this way the people expected to buy securities such as SBI, which has a high interest rate, and this is an effort to get money circulating in the community decreased in number.
3) Cash reserve ratio means prescribed by the Central Bank to commercial banks whose magnitude depends on the decision of the central bank / government. With the way up the comparison between the money supply with money to settle in cash resulted in the ability of banks to create credit decreases and therefore the amount of money in circulation will be reduced.

b. Fiscal policy is a policy with the financial berhubugan government. The shape of this policy include:
1) Reduction in government spending, so that overall spending in the economy can be controlled.
2) Raise taxes, will result in reduced public revenue and money of this effect on people's purchasing power is declining, and certainly the demand for goods and services must be reduced consumptive nature.



c. Non-Monetary policy can be done by raising production, wage policies and price controls and distribution of goods.
1) Menaikan production, is quite an effective way to remember the inflation caused by increases in consumption goods is not commensurate with the amount of money in circulation. Therefore, the government has made a priority of production or provide assistance (subsidy) to the fuel production sector, production of rice.
2) wage policy, not the other is an attempt to stabilize wages, in the sense that wages are not often raised because of the increase is relatively frequent will increase purchasing power and ultimately will increase the demand for goods overall and will eventually lead to inflation .
3) Monitoring the price and distribution of goods not intended to be the price increase occurs, it is like the government in setting the highest price (the highest retail price / HET). Good price controls will not work without supervision. Good supervision will usually cause the black market. To avoid the black market distribution of goods must be carried out smoothly, as did the government through Bulog or KUD.


Some of the things associated with inflation:
1. Deflation, the purchasing power of money has increased, because the amount of money in circulation is relatively less than the amount of goods and services available. The purpose of the devaluation was to increase exports of goods, balance of payments into a surplus.
2. DEFRESIASI, decreased the exchange rate against foreign currencies is happening in financial markets.
3. APPRECIATION, increase the value of a currency exchange rate against foreign currencies is happening in financial markets.
4. OPEN INFLATION, circumstances in which the prices move out of control, and there is excess demand for goods.
5. SANERING, cutting the value of currency by the government.
6. Revaluation, the government policy to raise the value of domestic currency against foreign currencies.
7. Devaluation, government policies to reduce the value of domestic currency against foreign currencies on purpose. Deflation could be solved by increasing government spending, increase public spending.



INFLATION REPORT (Consumer Price Index)
Based on the calculation of annual inflation

Timeseries Graph

Month Year Inflation Rate
8.60% February 2009
9:17% in January 2009
December 2008 11:06%
November 2008 11.68%
October 2008 11.77%
September 2008 12:14%
August 2008 11.85%
July 2008 11.90%
June 2008 11:03%
May 2008 10:38%
April 2008 8.96%
March 2008 8.17%
February 2008 7.40%
7:36% in January 2008
6:59% in December 2007
November 2007 6.71%
6.88% October 2007
September 2007 6.95%
6:51% in August 2007
6:06% July 2007