Inflation vs Deflation: What's the difference?
(What is inflation and deflation)

Inflation refers to a situation where the general price level of goods and services rises over time, leading to a decrease in the purchasing power of currency. This means that the same amount of money can buy fewer goods and services than before. Typically, inflation is measured by calculating the percentage change in the Consumer Price Index (CPI), which is a basket of goods and services typically purchased by consumers.

In contrast, deflation refers to a scenario where the general price level of goods and services decreases over time, leading to an increase in the purchasing power of a currency. This means that the same amount of money can buy more goods and services than before. Deflation can be caused by a decrease in the demand for goods and services, a decrease in the money supply, or an increase in the supply of goods and services.

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