Definition of deflation, It's causes and effects

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Deflation:-

Deflation is a decrease in general price level of goods and services in an economy. Depression usually happens when demand is low or when supply is high.


Causes of depression:-

1- Structural Change in Capital Market

2- Decrease in Currency Supply

3- Increase Productivity


Effect of deflation:-

1- Reduced Business Revenues

2- Lowered Wages and Layoffs

3- Reduced Stake in Investments

4- Changes in Customer Spending

5- Reduce Credit

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