ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Deflation is the exact opposite of inflation. In this condition, the price level of goods and services decrease exponentially which results in an increase of the buying power of the money.

Detailed explanation-2: -Deflation is a phenomenon, which is exactly the opposite of inflation. When deflation occurs, the prices of goods and services fall which in turn increases the purchasing power of the money. It also means that more goods and services can be bought with the same amount of money.

Detailed explanation-3: -An economy’s overall increase in the cost of goods and services can be described as “inflation.” Inflation is defined as a decrease in the buying power of money when the overall cost of goods and services increases. Inflation is the opposite of deflation, which is a long-term decline in the cost of living.

Detailed explanation-4: -Inflation happens when the price of goods and services increase, while deflation takes place when the price of the goods and services decrease in the country. Inflation and deflation are the opposite sides of the same coin.

Detailed explanation-5: -Although both inflation and depression have catastrophic economic effects to varying degrees, they are diametrically opposed in the economic concept.