Explain the terms inflation and deflation, Microeconomics

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Discuss whether inflation or deflation is the more serious problem for an economy.

Inflation is a consistent general enhance in the price level, whereas deflation is a consistent fall in the general price level, i.e. negative inflation.
The basic damage to an economy of both, ultimately showing - perhaps - that deflation, whereas rarer, can be held by many economists to be the greater of two evils.

 


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