Question: Which of the following concept is just opposite to Inflation?
Options:
Stagflation
Deflation
Recession
Hyperinflation
🔑Key Points:
Deflation means a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0%.
Inflation reduces the value of currency over time, but sudden deflation increases it.
Deflation can be caused by an increase in productivity, a decrease in overall demand, or a decrease in the volume of credit in the economy.
Deflation is a sign of a weakening economy because falling prices lead to lower consumer spending which is a major component of economic growth.
Deflation is usually associated with a contraction in the supply of money and credit, but prices can also fall due to increased productivity and technological improvements.
In particular, Deflation can harm borrowers, who can be bound to pay their debts in money that is worth more than the money they borrowed, as well as any financial market participants who invest or speculate on the prospect of rising prices.
Deflation means a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0%.
Inflation reduces the value of currency over time, but sudden deflation increases it.
Deflation can be caused by an increase in productivity, a decrease in overall demand, or a decrease in the volume of credit in the economy.
Deflation is a sign of a weakening economy because falling prices lead to lower consumer spending which is a major component of economic growth.
Deflation is usually associated with a contraction in the supply of money and credit, but prices can also fall due to increased productivity and technological improvements.
In particular, Deflation can harm borrowers, who can be bound to pay their debts in money that is worth more than the money they borrowed, as well as any financial market participants who invest or speculate on the prospect of rising prices.