The Free Market Center

The Free Market Center

Inflation—Deflation

Deflation - Wheat Production Increases

(Decreasing Money Supply)

Wheat Production Increases

Shoe Production Fixed 0.00%/Month
Wheat Production Increase 1.50%/Month
Money Supply Decreases -0.50%/Month

Wheat production increases 1.5% per month.

Money supply decreases.

Inflation-Deflation
The dollar prices of both wheat and shoes decline, while only wheat production increases. See the influence of money supply changes.

Direct Exchange

Inflation-Deflation
You've seen this before.

Deflation has the same general effect on wheat as it did with shoes.

Next, we'll look at decreasing wheat production.

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& James B. Berger. All rights reserved.
To contact Jim Berger, e-mail:

© 2010—2020 The Free Market Center & James B. Berger. All rights reserved.
To contact Jim Berger, e-mail: