What is the difference between Inflation and Deflation?

Inflation is the process wherein the goods and the services that are available in different stores will get a boost. This means that people would need to spend more money on items that they normally purchase. Deflation means that the prices of the goods and the services that are available will be lowered which means that you can spend more money on items for a limited amount of money.

Usually, inflation signifies that there is something wrong with the economy while a deflation means that the economy is starting to improve. Take note that a little bit of inflation is considered to be good for the economy while deflation will be bad for the country who is experiencing this as a whole.

Both inflation and deflation have to do with movement. Depending upon what you are talking about, deflation goes down or lessens and inflation increases or gets more prominent. Most of the time, inflation is heard when speaking about the economy. Every year, we have to pay more money for the same items from the year before. This is because of inflation.

The value of a dollar is not worth as much as it did years ago. The opposite of inflation is deflation. Deflation takes place with cars, especially. This means that the car’s value deflates as soon as you drive it off the lot. It is never worth as much money as it did when it was first bought. Houses usually inflate.