What Causes Deflation











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If inflation is bad for a nation, then deflation must be good, right? Well, not exactly. In this lesson we'll outline the causes and consequences of deflation, a decrease in the average price level of goods and services over time. We'll also look briefly at the types of solutions policymakers have to avoid falling prices, which could give rise to a dreaded deflationary spiral. • Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! http://econclassroom.com/?page_id=5870

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