ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Deflation is when the general price levels in a country are falling-as opposed to inflation when prices rise. 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.

Detailed explanation-2: -Deflation is the opposite of inflation. It is a decrease in the general price level of goods and services and represents an increase in the value of money, where an amount of money can be exchanged for more goods and services.

Detailed explanation-3: -Deflation is when consumer and asset prices decrease over time, and purchasing power increases. Essentially, you can buy more goods or services tomorrow with the same amount of money you have today. This is the mirror image of inflation, which is the gradual increase in prices across the economy.

Detailed explanation-4: -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.