ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Definition: When the overall price level decreases so that inflation rate becomes negative, it is called deflation. It is the opposite of the often-encountered inflation. Description: A reduction in money supply or credit availability is the reason for deflation in most cases.

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 Definition 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.

Detailed explanation-4: -Deflation is a decrease in the general price level of goods and services. Put another way, deflation is negative inflation. When it occurs, the value of currency grows over time. Thus, more goods and services can be purchased for the same amount of money.

Detailed explanation-5: -Inflation is an increase in the overall price level. The official inflation rate is tracked by calculating changes in a measure called the consumer price index (CPI). The CPI tracks changes in the cost of living over time. Like other economic measures it does a pretty good job of this.