For those of you who have often been involved in economic studies, you may already be familiar with the terms “Inflation and deflation”. However, this term will be foreign to those who are not usually involved in the world of economic education. However, it is also important for us to know the meaning of inflation and deflation.
Inflation itself is a condition where prices experience a general increase in an economy within a certain period of time. There are several factors causing this inflation, including an increase in raw materials, an increase in salaries that is not balanced with productivity, or excess money circulating in the financial system.
As a result of inflation the purchasing power of money can decrease
Because the amount of money you have now is not necessarily enough to buy the same goods in the future.
On the other hand, deflation is a general telemarketing lists decline in prices in an economic. System and within a certain period of time. There are also many factors. That cause deflation, including a decrease in demand for goods and services, excessive productivity. Of goods or services, or a lack of circulation of money in a financial system.
In such conditions, the purchasing power. Of money increases, because the amount of money you have is able. To buy the same goods/services in the future.
So, what is the impact on our economic conditions, when inflation or deflation occurs.
If inflation occurs what will happen is
Decreases the purchasing power of money: if prices rise, then the money you have may not be enough to buy the same goods in the future. This causes BTB Directory consumers to feel less able to purchase desired goods, which can reduce overall economic activity.
Reduced confidence in the currency: if the inflation rate is too high, people may lose confidence in the value of the currency and tend to choose to save their money in other forms such as gold or property. This can reduce economic activity because people are less inclined to spend money.
If deflation occurs.