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Inflation occurs when the prices of goods and services rise, while deflation occurs when those prices fall. The balance between these two economic states is delicate and the economy can move quickly from one state to the other. Central banks closely monitor the level of price changes and act to contain deflation or inflation by conducting monetary policy, such as setting interest rates.
Inflation occurs when the prices of goods and services rise, while deflation occurs when those prices fall. The balance between these two economic states is delicate and the economy can move quickly from one state to the other. Central banks closely monitor the level of price changes and act to contain deflation or inflation by conducting monetary policy, such as setting interest rates.
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