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Deflation is a situation where the amount of the money supply is in a state of shrinking. It's a good thing if inflation is running high and out of control. In a normal economy, deflation means less money in circulation which causes the economy to suffer. Money is scarce and prices may be too high in relation to the money supply. This causes economic problems.
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∙ 8y ago
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Is the deflation good for the economy?
yes,deflation...in my own opinion is good to the country,but permit me to say the little i know about (inflation) and( deflation).inflation...means when there is excess of money circulating within a given country while deflation means when there is less money.......so deflation is good for a country in a way that,there will be no inappropraite in terms of goods and services,,
What are the roles of money supply in the economy?
Money supply determines the value of money i.e. if there are a lot of money in an economy, the value decreases and the other way around. Therefore, money supply essential decides the price of a good (if the money is worth less, the prices go up ...etc...) Hence, according to monetarists, money supply is the key ingredient of inflation (and deflation)
What are the roles of money in the economy?
Money supply determines the value of money i.e. if there are a lot of money in an economy, the value decreases and the other way around. Therefore, money supply essential decides the price of a good (if the money is worth less, the prices go up ...etc...) Hence, according to monetarists, money supply is the key ingredient of inflation (and deflation)
Why did deflation hurt farmers?
Deflation hurt farmers because they were unable to get a good amount of money for their crops. This meant it was harder to make a living.
Why is deflation a problem?
Deflation is a situation where the prices of goods and commodities in a country are going down. i.e., there is negative inflation. This is caused due to reduced supply of Money/credit. The answer for whether Deflation is good or bad depends on what causes the fall in price of goods. If the prices go down because of excess supply/production of goods then it is good for the economy. Everyone can afford such items and the Gross per capita consumption would go up. If the prices go down because of lack of liquidity in the economy then it is a problem. Deflationary economic situations usually are considered the precursor for depressions or recessions. During such times there would be a great demand for money but the supply would be lesser (that is people cannot afford it) During such situations the economy would go into shambles. There would be unemployment, people cannot get loans from banks, banks do not have cash to lend to the public, the government doesn't have money to infuse into the economic system to stimulate it etc.
A period of deflation is good news for senior citizens on fixed incomes.?
It is true that a period of deflation is good news for senior citizens on fixed incomes.
Is it good to have over supply of money in the Philippines?
no...it will create inflation
What bad thing and good thing happened to miners?
they get money for it
What is a good thing to have when you go shopping?
Money. Definitely money.
What Is a good analogy for the packaging problem encountered by DNA?
vacuum deflation
Is advertising a good thing or a bad thing?
It's a good thing because you can get lots of money IF the people buy your products. If not, it's just a waste of time and money, as ads cost LOTS of money.
Why is spending money a good thing?
it makes me feel good :)
