Deflation

A broad fall in prices for goods and services is referred to as deflation, and it is often accompanied by a reduction in the amount of credit and money available to the economy. The value of money increases over time during a deflation.

Although a decrease in the availability of credit and money is typically a sign of deflation, prices can also drop as a result of rising productivity and advancements in technology. The attractiveness of various investment possibilities varies depending on whether the economy, price level, and money supply are deflating or inflating.