All else equal, a decrease in the rate of inflation increases planned spending and increases short-run equilibrium output.
Inflation rate is the rate at which prices for goods and services rise over a given period of time. Inflation is generally a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.
In a market economy, prices for goods and services can always change. Some prices increase; some prices decrease. Inflation happens when there is a broad increase in the prices of goods and services, not just of individual items; it means, you can buy less for $1 today than you could yesterday.
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