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o rosnących kosztach życia, inflacja vs deflacja - Inflation vs Deflation business English


Annual inflation reached 15.6% in June, the highest figure in over 25 years, according to initial estimates from GUS - Central Statistical Office in Poland. The increase in prices of consumer goods is one of the highest in the EU ( European Union).

It's worth defining what inflation and deflation are before diving deep into our lesson with ESL BRAINS https://eslbrains.com/the-rising-cost-of-living/ about the rising cost of living.



Inflation


occurs when the prices of goods and services rise. It is caused when goods and services are in high demand, thus creating a drop in availability. Supplies can decrease for many reasons; a natural disaster can wipe out a food crop, a housing boom can exhaust building supplies, etc.

deflation


occurs when too many goods are available or when insufficient money is circulating to purchase those goods. As a result, the price of goods and services drops. For instance, if a particular type of car becomes highly popular, other manufacturers start to make a similar vehicle to compete. Soon, car companies have more of that vehicle style than they can sell, so they must drop the price to sell the cars.





.The balance between these two economic conditions, opposite sides of the same coin, is delicate and an economy can quickly swing from one condition to the other.
Central banks keep a keen eye on the levels of price changes and act to stem deflation or inflation by conducting monetary policy, such as setting interest rates.



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