Deflation!

As this topic is Unit 2 so I don't know a lot about it!But I know some basic knowledge and will try to answer the questions!

1. What are the consequences of sustained deflation?

First of all,what is deflation...I think deflation is opposite to inflation.So that,"deflation" means a persistent decrease in the general price level of goods and services.What are consequences of sustained deflation...which I understand as what it will effect if we keep deflation?Because the price of goods is falling, consumers have an incentive to delay purchases and consumption until prices fall further, which in turn reduces overall economic activity - contributing to the deflationary spiral.Investment also falls,leading to change in aggregate demand.

1. How does deflation affect wealth?

Deflation causes when the supply of money going down and the supply of goods going up.So if the supply is going down,making money scarcer,so income of people is less.Otherwise,deflation affects wealth.Income of people is less,the economic growth is falling.

1. How does deflation affect debt?

Deflation also amplifies the sting of debt.The payments are making in the service of a debt represent a larger amount than they did when the debt was first incurred.Actually I don't know how to exactly answer this question.