https://3webee.net/wp-content/uploads/2019/06/conference_groot_tcm47-380493.jpg 400 600 Tyrone Obrien https://3webee.net/wp-content/uploads/2019/07/oie_transparent-25.png Tyrone Obrien2019-06-25 10:48:022019-07-12 10:52:15Deconstructing Inflation And Deflation
Inflation and Deflation are both components related to the downfall of the nation’s economy. Inflation occurs due to the rise in the prices of services and goods, whereas deflation occurs due to the decline in the prices of services and goods. It is difficult to maintain a proper balance in both, and the extreme of any one of these can lead to economic issues. Deflation and inflation can be experienced in different sectors of the economy of the nation, and the government keeps refreshing the rates of the products in the market to balance the two sides. Let us find out the factors which contribute to the inflation and deflation of an economy.
Deflation can occur when the resources are produced more than the demand, and as there are no consumers to the goods and services, the prices drop significantly. When the industries become famous for their ideas, other companies start buying the patent to create their own products. This results in an unlimited supply of products. Overstacking of the inventory forces the companies to drop their prices, which leads to deflation. When the prices are lowered, people get encouraged to apply for loans, but the providers tend to refuse such loans due to high demand, which adds up to more deflation. Prolonged deflation in any sectore of the industry can result in affecting the economy of a nation and increased unemployment. It is more dangerous than inflation.