Deflation Explained
Deflation occurs when the general price of goods and services reduces and causes inflation to fall below 0%.
Deflation increases the relative value of money and allows consumers and businesses to buy more goods and services. Whilst deflation can seem a good thing in the short term, deflation can aggravate or cause recessions as demand drops as people believe the goods/services they buy now may be cheaper tomorrow. The resulting drop in demand-inflation can result in over-production / excess availability of services which in turn leads to an economic slump.
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Comprehensive Inflation Guides and Calculators
Explore our detailed guides and calculators to understand inflation, salary adjustments, and historical trends. Whether you need to calculate inflation impact or learn about core inflation, our resources provide valuable insights.
- What is Inflation? Understanding the Basics
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- Core Inflation Explained - Understanding Price Stability
- Types of Inflation - Demand-Pull, Cost-Push & More
- Deflation Explained - How It Affects the Economy
- How to Calculate Inflation - A Step-by-Step Guide
- What Causes Inflation? Economic Factors Explained
- Consumer Price Index (CPI) Explained
- Historic Inflation Rates - Trends and Analysis