Bad(malevolent)deflation

• Malevolent deflation is caused a decrease in aggregate demand
• What is malevolent deflation caused by?

  decrease in aggregate demand
• In malevolent deflation AD shifts to the left
• Malevolent deflation is long term and anticipated
• Malevolent deflation is often?

  long term and anticipated
• Malevolent deflation is long term and?

  anticipated
• Malevolent deflation is anticipated and?

  long term
• As malevolent deflation is anticipated this means that consumers will delay spending
• What will consumers do if deflation is anticipated?

  delay spending
• As consumers income will be falling it will be harder to pay back debt this increases the real value of debt
• What does falling income do the real value of debt?

  increases