Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
This means the reduction in the overall level of costs and prices, where the rate of inflation turns negative. Deflation refers to the drop in the prices/costs of products and services, usually linked to lower supply of credit/money in any economy. The currency’s purchasing power goes up steadily in a deflationary environment.
Deflationary scenarios are marked by reluctance amongst those borrowing funds from financial institutions and lenders, to repay the same. It may also indicate their inability to do so. In such a situation, the prices of real estate or other assets may also fall. They may be sold or offloaded below their actual market prices/values.
