inflation and deflation

Inflation refers to the general increase in prices of goods and services in an economy over time, resulting in the devaluation of money. It means that the purchasing power of a currency decreases, as more money is required to buy the same items. On the other hand, deflation is the opposite of inflation and refers to a general decrease in prices. In a deflationary environment, the purchasing power of money increases, as goods and services become cheaper. In summary, inflation is an upward movement of prices leading to a decrease in the value of money, while deflation is a downward movement of prices leading to an increase in the value of money.

Explore

Requires login.