mention any two negative effect of deflation
Negative effects of deflation include;
When prices of goods start to fall, consumers will hold money hoping to buy more in the future with only a few coins. This is also influenced by decrease in the money supply in the economy.
A decrease in prices of goods leads to a reduction in business profits while the amount owed remains the same. This increases the debt burden hence investors avoid taking more risks by failing to venture into the market.
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