how does deflation affect demand? (1 Viewer)

[222fish]

i have a quick question: how does deflation affect demand?
any answers will be greatly appreciated

 

[chazza]

i have a quick question: how does deflation affect demand?
any answers will be greatly appreciated

deflation would lead to lower prices
thus increase demand

 

[i-color]

deflation means that prices in the future will be lower. Therefore, if you expect prices to be lower in the future, you would forego current consumption in order to purchase goods and services in the future at a lower price. Thus, this causes demand to decrease at current, and demand to increase in future.

 

[Lorie]

also, look at it the other way. A decrease in demand will cause deflation. lower demand will reduce the causes of inflation (such as demand pull, imports and cost push)