(a) Mild/Gradual/Creeping Inflation:-

This is an inflationary situation where prices rise very slowly not exceeding 3% per annum. This type of inflation is generally unnoticeable by the public. This rate of inflation is good because it acts as an incentive to producers where savings investment, output and employment opportunities increase.

(b) Hyperinflation/runaway/ Galloping Inflation:-

This is a type of inflation' where persistent increase in prices of goods and services is at a very high rate exceeding 10% per annum: During the period of this type of inflation, money completely loses value and people carry money in large volumes in order to effect a small transaction. People loose trust in money as store of value and prefer to hold assets rather than money. It therefore discourages savings and investment.