Differentiate between inflation and deflation-00629
This subjective question is related to the book/course
vu cs403 Database Management Systems.
It can also be found in
vu cs403 Mid Term Solved Past Paper No. 3.
Question 1: Differentiate between inflation and deflation.
Answer:
Inflation is a situation in which there is a continuous rise in the general price level.
WHEREAS Deflation is the opposite of inflation and occurs when the general level of prices falls.
Inflation is when the money supply increases by more than the real economy does. This means that one unit of currency will buy less than it could in the past.
Deflation is when the money supply contracts, making a unit of currency able to buy more than it could in the past. This is the exact opposite of inflation, but it is also bad.
