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 ▸

Explain two causes of price inflation


What would be the impact on the multipler effect given an increase in income tax?


Explain reasons why a firm would want to merge with another firm in the same industry.


Explain the importance of low interest rates in bringing about a recovery from recession in an economy like the UK. (10)