What is deflation?

Deflation is a decrease in the general price level of goods and services in an economy, resulting in an increase in the purchasing power of money. This can occur due to factors such as decreased consumer demand, increased productivity, or a decrease in the money supply. Deflation can have negative effects on an economy, such as lower business profits, increased debt burdens, and a decrease in economic growth.

Deflation is a decrease in the general price level of goods and services over time. It is the opposite of inflation, which is an increase in the general price level. Deflation can be caused by a decrease in aggregate demand, an increase in the supply of goods and services, or a combination of both.