Inflation and Deflation
The terms inflation and deflation describe long-term trends in prices. Inflation means that the same things cost more than they did before. Typical causes for inflation include government price support policies (subsidies) and deficit spending. Higher production costs (caused by wage increases for the workers or tighter environmental protection regulations) or lower availability of resources can have the same effect. Deflation, on the other hand, means that the same things cost less than they did before. Deflation can be caused by more efficient production methods (which lowers production cost) or higher availability of resources.
The terms inflation and deflation usually refer to the overall economy and not to specific ...
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