Why does inflation decrease but prices continue to go up?

This is a good question and it refers to the difference between deflation and disinflation. Sometimes if inflation is at 2% and it decreases to 1.5% for example, there will still continue to be a general price level  increase of 1.5% over the next month, but the rate of increase in prices has slowed down.

Disinflation is this slow down in the increase in prices but the prices do still increase. What you're thinking of is deflation which means that inflation is negative and the price level is decreasing. Deflation is quite rare in economics but disinflation happens all the time due to slowing of the increase in the price level.

LB
Answered by Luke B. Economics tutor

2362 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Why does the price elasticity of demand (PED) of a product change at different levels of production?


Describe the long run aggregate supply curve.


Evaluation points for macroeconomics (Unit 2)


Discuss the possible impact of supermarket monopsony power on both food suppliers and consumers?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning