Some of the notable characteristics or features of deflation can be pointed out as follows:
1. Fall In Price
Deflation is a process of fall in price level. Price of the products will fall down rapidly.
2. Continuous Process
It is a continuous process of price fall for a long period of time.
3. Increase In The Value Of Money
Purchasing power or value of money will be increased in deflation.
4. Decrease In Supply
The main cause of deflation is a decrease in supply of money in the economy.
5. Wages And Salary
Salary and wages of workers will be decreased due to limited supply of money in the economy or deflation.
Also Read:
Also Read:
6. Increased Output
Production or output of the products will be increased.
7. Control
Deflation can be controlled by supplying adequate amount of money in the market, increasing expenditure and cutting interest rate.
