... general standard of living. However, deflation in mostly considered very damaging because it increases the sense of uncertainty by discouraging people for investment, they are "persuaded to put off spending in the hope that the prices would fall further." Consequently, a decrease in demand would lead to a decrease in profit of businesses, which would then lead to cut of employees and also in production. The article illustrates this by saying that these falls in the average level of prices are "dragging the producer price index (PPI) down by 1.9% over the month." At the same time, there has been a fall in the industrial sector which "has been hard hit by the sluggish economy." However, although the rate of the industrial production had fallen, there is an increase in the relative price (the price of one good in comparison with the price of other goods.) of some individual goods. ...

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