This is an economic condition where there's a decrease in general price levels or a negative inflation rate. It often happens when supply is higher than demand.
Imagine you're at a yard sale with tons of items but very few buyers. To sell anything at all, you might have to lower your prices. That's deflationary pressure - too many goods or services chasing too few buyers leading to falling prices.
Inflation: The rate at which general level of prices for goods and services is rising.
Stagflation: A condition of slow economic growth (stagnation) and relatively high unemployment accompanied by rising prices (inflation).
Hyperinflation: Extremely rapid or out-of-control inflation.
Study guides for the entire semester
200k practice questions
Glossary of 50k key terms - memorize important vocab
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.