Mata10
Member
- Joined
- Apr 1, 2013
- Messages
- 31
- Gender
- Male
- HSC
- 2013
Deflation is the reduction in the general level of prices in an economy. Although deflation is better from a buyer's point of view, it is costly for suppliers as it leads to reduction in production due to increased cost of production which can result in closing of industries and business, therefore increasing unemployment. Furthermore, deflation makes existing debts larger in real terms and can potentially lead to an economic downturn.I'm going to try and revive this as HSC approaches:
Why is deflation worse than inflation?
Define the Natural Rate of Unemployment (NAIRU). (2 Marks)
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