Question

What are the effects of deflation in production and distribution

Answer 1

Answer:

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The effect of deflation: It occurs when the overall cost level of goods and services decreases within an economy. When the supply of money rises more gradually than the supply of goods and services, which leads to an increase in the value of money and a fall in prices, as you can purchase more with less income.

Answer 2

Explanation:

Deflation occurs when the general price level of goods and services in an economy decreases. Deflation results when the supply of money increases more slowly than the supply of goods and services,which causes the value of money to increase and prices to decrease,since you can buy more with less money.