A decline in general price levels, often caused by a reduction in the supply of money or credit. Deflation can also be brought about by direct contractions in spending, either in the form of a reduction in government spending, personal spending or investment spending. Deflation has often had the side effect of increasing unemployment in an economy, since the process often leads to a lower level of demand in the economy. opposite of inflation.

Use deflation in a sentence

You should try and figure out a way to be prepared for any deflation and make the correct adjustments on time.

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My boss advised me to invest in gold because he believed that gold was an investment that was resistant to deflation and would not decline in value.

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In the last recession, many prices appeared to be falling because of inadequate demand, so central banks decided to do everything they could to avoid deflation.

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