Originally Posted by freeze4real
So there's was a deflation decrease in price of goods. And inflationary also fell ? Is that it ?
Sorry, to use the same example as Irish Goat.
But if a Mars bar costs 1 euro in 2010
With inflation of 3% in 2011 - it now costs 1.03
With inflation of 2% in 2012 it now costs 1.05.
So, as you can see the Mars Bar in 2012 is still more expensive than the Mars Bar in 2011.
The rate of increase in prices may have slowed in 2012 (from 3% to 2%) but it was still a positive rate of increase (i.e. inflation rather than delfation).
There was NO deflation in this example.