Defining deflation, inflation and disinflation
By The Associated Press
DEFLATION: A widespread and prolonged drop in wages and the prices of goods and services, home values, stocks and other assets. The nation's last serious bout with deflation was during the Great Depression in the 1930s.
INFLATION: A persistent rise in the prices of goods and services for consumers, as well as a run-up in commodity prices like oil. To try to keep ahead of rising prices, workers will demand higher pay, leading to wage inflation. The nation's last major inflation problem was in the late 1970s and early 1980s. Consumer prices spiked 13.3 percent in 1979 and an additional 12.5 percent in 1980.
DISINFLATION: A slowing in the rate at which prices rise. Typically happens during recessions, when sales drop and businesses are unable to pass on price increases to shoppers.
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