हिन्दी ಕನ್ನಡ മലയാളം தமிழ் తెలుగు

Summary causes for Deflation

Posted by:
Published: Thursday, August 11, 2011, 14:39 [IST]
 
Share this on your social network:
   Facebook Twitter Google+    Comments Mail

Summary causes for Deflation

There can be four possible reasons for deflation. They can even take place under any set of combination also.

-Decreasing Money Supply
-Increasing Supply of Goods
-Decreasing Demand for Goods
-Increasing Demand for Money

Important Increasing demand or decreasing supply of money have the same result i.e. "tight money" either way people want more money than is available.

Both could also result in (or cause) higher interest rates. But the higher interest rates should also tend to balance (or decrease the demand for money because it is now more expensive).

In other words as interest rates rise at some point the demand drops off because people don't want it bad enough to pay such high rates.

Write Comments

Please read our comments policy before posting

Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'
Goodreturns iPad App
Goodreturns iPad App
Download GoodReturns iPad App and enjoy it. Learn more about Oneindia GoodReturns on the App Store.
Download Goodreturns iPad App