Inflation & deflation

1. INFLATION & DEFLATION

2. INFLATION
• It occurs when the price of goods and services
rises.
• EXAMPLE??

3. INFLATION
• Inflation is caused when goods and services
are in high demand, thus creating a drop in
avaibility .
• Consumer are willing to pay more for the item
they want.
• It causes- manufacturer and service provider
to pay more .
• Supplies can decrease for many reasons .
• Ex. A natural disaster can wipe out a food
crop.

4. DEFLATION
•Deflation occurs when prices of goods
,services decreases( more supply of goods in
market) , when too many goods are available
in market .
•When there is not enough money circulating
to purchase those goods.
•Ex. Car-particular*

5. DEFLATION
• WHEN CREDIT providers detects a decrease in
prices , they often reduces the amount of
credit they offer.
• This create credit crunch where consumers
cannot access loan to purchase big items.
• Thus leaving companies whit over stocked
inventory and leading to further deflation.
• Deflation can lead to an economic ression or
depression