What is a decrease in the general level of the prices of goods and services

History

2 answers:

ddd [48]3 years ago

6 0

Answer:

A decrease in the general level of the prices of goods and services is called deflation.

Explanation:

Deflation is the opposite of inflation and involves a reduction in the money supply, which in turn causes the value of money to increase. This generally causes the general price level to fall.

There is consensus that deflation arising from a reduction in the money supply can be detrimental, while when it is caused by an increase in the amount of goods and services in the economy is seen as positive. Unforeseen deflation benefits those who save money as they become more worthwhile, relative to what they thought it would be if there was no deflation. Conversely, it hurts those who borrowed money. A sharp deflation can create unemployment if the price of work cannot go down, because a lower price level causes the relative price of work to rise. If wages do not fall, companies cannot afford the marginal worker, as their production does not outweigh the increase in wages.

crimeas [40]3 years ago

3 0

Answer:

Disinflation is a decrease in the rate of inflation – a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time.

Explanation:

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