Inflation Related Terms


 
 
Concept Explanation
 

Inflation Related Terms

Deflation

A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an economic depression. Central banks attempt to stop severe deflation, along with severe inflation, in an attempt to keep the excessive drop in prices to a minimum.

Hyperinflation

Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is a situation where the price increases are so out of control that the concept of inflation is meaningless.

Stagflation

A condition of slow economic growth and relatively high unemployment a time of stagnation accompanied by a rise in prices, or inflation.

Disinflation

A slowing in the rate of price inflation. Disinflation is used - to describe instances when the inflation rate has reduced marginally over the short term. It is used to describe periods of slowing inflation.

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