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Glossary entry · Money in motion
Deflation
Definition
A general decline in prices across the economy — the opposite of inflation. While cheaper things sound great, sustained deflation usually signals weak demand, deferred spending, and economic stagnation. Often happens during deep recessions and is hard to reverse.
Example
Japan experienced extended periods of mild deflation from the 1990s through the 2010s.
Related
Money in motion
Compound interest
Interest paid not just on what you put in, but on the interest you have already earned.
Read →Inflation
The rate at which the general price of things rises. Same money, less purchasing power.
Read →Interest rate
The percentage something pays — or costs — per year.
Read →Return
The gain (or loss) on an investment, usually expressed as a percentage per year.
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