На вопросы по тексту INFLATION AND DEFLATION.
An inflationary development is characterized by rising prices within a certain period of time.
The rising prices is a consequence of an uneven development in the quantity of goods on offer and the quantity of money available, which it self determines the demand and is the inflation rate.
The causes of inflation are generally complex and can arise either from the goods or from the monetary side.
The consequences of inflation are extremely damaging for the economy. Inflation becomes stagflation when economic growth decreases or comes to a halt, but inflation continues to rise. If the state does not take measures to combat stagflation, this leads to deflation.
Deflation, the opposite development to inflation, represents a reduction in the supply of money in comparison with the supply of goods.
Answer the questions using the text:
1. When does inflation become stagflation ?
2. What is deflation ?
3. What are the characteristics of inflation