deflationary spiral (Meaning)
deflationary spiral (n)
an episode of deflation in which prices and wages decrease at an increasing rate and currency gains in value
Synonyms & Antonyms of deflationary spiral
No Synonyms and anytonyms found
deflationary spiral Sentence Examples
- A **deflationary spiral** occurs when falling prices lead to decreased consumer spending, further reducing demand and pushing prices even lower.
- The Great Depression serves as a cautionary tale of a severe **deflationary spiral** that crippled the global economy.
- Central banks aim to prevent **deflationary spirals** through monetary policies that encourage borrowing and investment.
- During a **deflationary spiral**, businesses are forced to cut costs, often leading to layoffs and wage reductions, further weakening consumer spending power.
- **Deflationary spirals** can create a vicious cycle, trapping economies in a state of low growth and stagnant wages.
- Recognizing the early signs of a **deflationary spiral** is crucial for policymakers to implement timely interventions.
- While some view **deflationary spirals** as a way to reduce debt burdens, the long-term consequences for economic stability are severe.
- Unlike inflation, which can be addressed through raising interest rates, **deflationary spirals** require more complex solutions like quantitative easing.
- Studying historical examples of **deflationary spirals** helps economists develop preventative measures and effective recovery strategies.
- Maintaining a balance between preventing inflation and avoiding **deflationary spirals** is a key challenge for central banks in ensuring economic well-being.
FAQs About the word deflationary spiral
an episode of deflation in which prices and wages decrease at an increasing rate and currency gains in value
No synonyms found.
No antonyms found.
A **deflationary spiral** occurs when falling prices lead to decreased consumer spending, further reducing demand and pushing prices even lower.
The Great Depression serves as a cautionary tale of a severe **deflationary spiral** that crippled the global economy.
Central banks aim to prevent **deflationary spirals** through monetary policies that encourage borrowing and investment.
During a **deflationary spiral**, businesses are forced to cut costs, often leading to layoffs and wage reductions, further weakening consumer spending power.
