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Deflation

Economy Term

What is Deflation?

Deflation is constant decline in general level of prices, usually attributed to contraction of available money and credit.

When the volume of money declines but quantity of products and services remain unchanged or decline on the lower level, results are higher lower prices (Deflation).

Deflation is measured with CPI on the retail level and with PPI on the Wholesale level

The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households.

The CPIs are based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living.

Prices are collected each month in 87 urban areas across the country from about 4,000 housing units and approximately 25,000 retail establishments-department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments.



   
     

Deflation

Economy Term

What is Deflation?

Deflation is constant decline in general level of prices, usually attributed to contraction of available money and credit.

When the volume of money declines but quantity of products and services remain unchanged or decline on the lower level, results are higher lower prices (Deflation).

Deflation is measured with CPI on the retail level and with PPI on the Wholesale level

The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households.

The CPIs are based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living.

Prices are collected each month in 87 urban areas across the country from about 4,000 housing units and approximately 25,000 retail establishments-department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments.



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