Aparna Lucknow, India 601 Questions 0 Answers 0 Best Answers 678 Points View Profile Aparna Asked: September 30, 20212021-09-30T17:08:22+05:30 2021-09-30T17:08:22+05:30In: Economics What is Deflation? What is Deflation? key economy terms Share Facebook 1 Answer Recent 0 Questions 518 Answers 176 Best Answers 0 Points View Profile Best Answer [Deleted User] 2021-09-30T17:11:27+05:30Added an answer on September 30, 2021 at 5:11 pm Deflation When the overall price level decreases so that inflation rate becomes negative, it is called deflation. It is the opposite of the often-encountered inflation. A reduction in money supply or credit availability is the reason for deflation in most cases. Reduced investment spending by government or individuals may also lead to this situation. Deflation leads to a problem of increased unemployment due to slack in demand. 1 Reply Share Share Share on Facebook Share on Twitter Share on WhatsApp Leave an answerCancel replyYou must login or register to add a new answer. Related Questions What is Spot Price? What is Sovereign Risk?