INFLATION AND DEFLATION LUIS DELGADO PER. 3 LUCAS LOPEZ TREVOR HARVEY.

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INFLATION AND DEFLATION LUIS DELGADO PER. 3 LUCAS LOPEZ TREVOR HARVEY

INFLATION: Demand Cost Expansion Of Money Supply

INFLATION: Demand: It’s like the pull of the operation. Demand increases so much it out strips supply. If product sells of current price they’ll sell out without much profit. They enjoy raising prices. This happens with growing economy, people feel confident and demand too much. If in under limit is good over bad inflation target.

INFLATION: Cost: The opposite of demand, “the push” Supply shortage and much demand = RAISED PRICES Wage inflation contribute. Natural disasters, depletion of natural resources Regulation and Taxation

INFLATION: Expansion of Money Supply: MORE MONEY = HIGHER PRICES AND DOLLAR WORTH LESS.

DEFLATION: In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate).

DEFLATION: Inflation reduces the real value of money over time; conversely, deflation INCREASES the real value of money. This allows one to buy more goods with the same amount of money over time.

THE END… ALMOST. The slower growth will then lead to lower inflation. Higher interest rates reduce consumer spending because: Increased interest rates increase the cost of borrowing, discouraging consumers from borrowing and spending. Increased interest rates make it more attractive to save money. Increased interest rates reduce the disposable income of those with mortgages. Higher interest rates increased the value of the exchange rate leading to lower exports and more imports. Thank You For Your Time, From Luis Delgado - Lucas Lopez Trevor Harvey

CITATIONS: "Policies To Reduce Inflation - Economics Blog." Economics Help - Helping to Simplify Economics. N.p., n.d. Web. 8 May century, the end of the 19th, and the deflation ended. "Deflation - Wikipedia, the free encyclopedia." Wikipedia, the free encyclopedia. N.p., n.d. Web. 8 May "Deflation Definition | Investopedia." Investopedia - Educating the world about finance. N.p., n.d. Web. 8 May <