Definition

A situation where prices of goods and services decrease over time, often leading to an increase in the value of money.

Example

The country experienced deflation, causing prices to drop significantly.

Conversation

I was reading about deflation and how it can affect the economy.

Oh really? I think it can lead to some serious issues for businesses.

Yeah, it makes sense, especially when prices keep dropping.

Exactly! It’s a tricky situation for both consumers and producers.

Synonyms & Antonyms

Root Explanation

Deflation is formed from "de-" (meaning down or away) and "flare" (from Latin "flare", meaning to blow or to inflate). The word describes the process of blowing down or reducing the amount of money in circulation, leading to a decrease in prices.

Memory Tip

Think of 'blowing down' ('de-') the amount of money or prices — that's what deflation means.

Visually Confused Words