Deflation is an economic concept. It is a decline of the general price level of goods and services in the economy or a particular country in any period of time. Deflation is the opposite of inflation. The main measure of deflation is a deflation rate expressed as a percentage in the year, usually using the consumer price index.
What is the impact of the defaltion, what does it mean in practice?
The result of deflation is a decrease in the value of finances, a general decline in financial markets and corporate assets. For customers, market prices fall during deflation. Deflation usually negatively affects the money supply in an economy that is falling. Deflation is not currently too frequent phenomenon in which the organizations actually meet, and which may be linked to the economic recession. However, it was different in the gold standard age when deflation was more common.
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