Respuesta :
The inflation rate is the percentage change in the price level from one year to the next. Deflation is a situation in which the price level is falling and the inflation rate is negative.
What are the inflation and deflation rates?
Prices rise during inflation and decline during deflation. Different asset classes can simultaneously experience inflation and deflation. Both have negative effects on economic growth when taken to the extremes, although for different reasons. The Federal Reserve, the country's central bank, attempts to regulate them as a result.
Why deflation Is worse than inflation?
Because interest rates can only be decreased to zero, deflation is worse. Demand is further decreased as businesses and consumers feel less fortunate and spend less. As a result, prices decline and businesses make less money. When customers anticipate price drops, they put off purchasing as long as they can. They are aware that the price will decrease the longer they wait.
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