ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Deflation is the general decline of the price level of goods and services. 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.

Detailed explanation-2: -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-3: -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-4: -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-5: -Key Takeaways. Inflation is an increase in the general prices of goods and services in an economy. Deflation, conversely, is the general decline in prices for goods and services, indicated by an inflation rate that falls below zero percent.