deflation- causes and consequences

Question 1

deflation

Answer 1

persistent fall in prices in an economy in a year

Question 2

different types of deflation

Answer 2

-demand-side (malignant) ad left
-supply-side (benign) stars right

Question 3

demand side deflation consequences

Answer 3

-lower growth
-long-term and anticipated (deflationary spiral):
delayed spending
positive interest rates (incentive to save if they always rise)
-increase value of debt

Question 4

supply-side deflation consequences

Answer 4

-comes with higher growth
-short-term and unanticipated: falling prices, input prices for firms

Question 5

evaluation of different types of deflation

Answer 5

type
anticipated/unanticipated
-cause