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Effects of Deflation on an Economy


Discuss whether or not deflation will benefit an economy.


Inflation and Deflation

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I. 🍃Introduction
- Brief explanation of the topic

II. Advantages of lower costs of production
- Increased international competitiveness
- Improved current account position
- Increased purchasing power
- Raised living standards
- Increased economic growth and employment

III. Disadvantages of lower costs of production
- Decreased total demand leading to a recession
- Postponed consumer purchases
- Reduced investment
- Reduced output by firms leading to reduced demand for raw materials
- Increased unemployment

IV. 👉Conclusion
- Summary of the advantages and disadvantages of lower costs of production
- Final thoughts on the topic

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