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2.1.2 Deflation (Edexcel A-Level Economics Teaching PowerPoint)


Last updated 12 Sept 2023

This teaching powerpoint covers the economics of deflation

Well, the basic definition of deflation is a sustained decrease in the overall price level of goods and services in an economy. This is the opposite of inflation, which is a sustained increase in prices. While inflation is generally seen as a bad thing, deflation can also have negative consequences. For example, when prices are falling, people may delay spending, which can lead to a slowdown in economic activity. In addition, deflation can also lead to higher levels of unemployment, as businesses cut back on production and lay off workers. In recent years, several countries have experienced deflation, including Japan, Greece, Spain, and the Netherlands.

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