Question

Mention any Two negative effects of deflation

Answer 1

Answer:

Pick me as a brainliest

Explanation:

Deflation occurs when the prices of good and services start to decline throughout the economy. This is a situation where decreasing price levels trigger a chain reaction that leads to lower production, lower wages, decreased demand, and even lower price levels. During a recession, the deflation spiral is a significant economic challenge because it further worsens the economic situation.

Answer 2

Answer:

The negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future.

Explanation:

HOPE IT IS HELPFUL