What is the difference between deflation and falling inflation?

Deflation is the state of an economy where prices are falling, representing a rise in the real value of money over time. If inflation is falling that means that the rate at which prices increase is reducing as time progresses. In short, deflation is a negative inflation figure as opposed to a decreasing inflation figure.

CG

Related Economics A Level answers

All answers ▸

How best to answer a question on how negative externalities lead to market failure.


Explain what could cause the pound sterling to appreciate.


Explain the 2 ways in which a reduction in interest rates can change consumption in the aggregate demand model of the economy.


Explain a policy that may reduce inequality in the United Kingdom