CREATIVE WRITING !!! TEACHING ON DEFLATION IN (BUSINESS) BY @RICHY20

hello friends how a e you all doing I hope all are moving fine and good am going to be taking on business I hope you all are ready and also I will hope to give assignment to do. this will really help all of us that are into this great platform and also help is to start a business well and know many branches in business

MEANING OF DEFLATION

this can be definitely defined in many terms both through my understanding it can be see as a continuous or regular fall in the general price levels of goods and services as a result of decrease in the volume of money in circulation.

CAUSES OF DEFLATIONS

• surplus budget or reduction of government expenditure
• increase in production (i.e) excess supply over demand
• excessively credit squeeze
• excessive use of fiscal policies
• use of physical policy. dis inflation is a deliberate goods of government to reduce the general price of goods

EFFECT OF DEFLATION

• RISDUSTRIBUTION OF INCOME :- real income of fixed income earnerses while business men decreases
• FAVORABLE BALANCE OF PAYMENT:- export are relatively cheaper than import foreign will be encouraged to buy more from the exporting
• ENCOURAGE SAVINGS:- savings is encourage because the value of money increase
• CREDITORS GAIN WHILE DEBTORS LOSE :- creditors gain because money has added value while debtors lose because the payment in reals terms
• INCREASE IN NATIONAL DEBT:- the burden of national debt is made heavier in real terms
• INCREASE IN CURRENCY VALUE:- the value of the country currency will be high because the purchasing power of a units of that currency will be increased
• INCREASE IN UNEMPLOYMENT:- investment is not encouraged and so the demand for factors of production decrease

CONTROL OF DEFLATION

• DEFICIT BUDGETS:- an increase in government expenditure helps to injects more money into circulation because the central banks prints more money
• USE OF EXPANSIONARY MONETARY POLICY:- banks should be encouraged to increase their lending to the public and so increase agregate
• REDUCTION INTAXATION:- taxes should be reduced so as to increase people disposable income and increase their demand for goods and services
• INCREASE IN WAGES :- this will increase the purchasing power and sometimes increase the volume of money in circulation
• USE OF OPEN MARKET OPERATION:- the central banks buys securities from commercial banks. this makes it possible for the commercials banks to be able to lend money out and increase the volume of money in circulation

CONCLUSION

indeed it is very good to know certain terms and problems in business so as to make the business work to a greater heights I will also be talking you all at my next class which we will also discuss on business see you there do not miss it. thanks for going through my post I love you all