Deflation
| Deflation is a decrease in the overall level of prices in an economy. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). When this happens, the prices of goods and services start to decrease. This can be a good thing if it is caused by an increase in productivity and a decrease in the cost of production. However, deflation can also be caused by a decrease in demand, which can lead to a decrease in production and an increase in unemployment. |
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