Deflation
(noun)
- A fall in the general price level of goods and services.
- A sustained decrease in the money supply, often caused by a reduction in government spending or a decrease in borrowing.
Origin:
Early 19th century, from french déflation or latin deflationem, noun of action from deflare "let fall".
Examples:
- The country was facing a deflation crisis, as prices were falling and the economy was shrinking.
- Deflation can be harmful for an economy, as it can lead to a decrease in consumer spending and business investment.
- Central bank tried to avoid deflation by lowering interest rates and increasing the money supply.
- The deflation in the housing market made it difficult for people to sell their homes.
- Deflation can make it difficult for companies to repay their debts, as the value of their assets falls.