DEFLATION

✓ WHAT IS DEFLATION?
Deflation is a condition of economies, it prompts a situation where the supply of money is fixed and does not grow as quickly as population and the economy. When this happens the available amount of hard currency per person falls, thereby making money more scarce and consequently the purchasing power of each unit of currency increases.
OR
We can say deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the value of currency over time, but sudden deflation increases it. This allows more goods and services to be bought than before with the same amount of currency. Deflation is distinct from disinflation, a slow-down in the inflation rate, i.e. when inflation declines to a lower rate but is still positive.


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