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FlameCow asked in Social ScienceEconomics · 8 years ago

What can cause the CPI to decrease?

2 Answers

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  • Anonymous
    8 years ago
    Favorite Answer

    Deflation. When consumers' confidence is down, people will stop buying. Inventories increase. Producers have to decrease price, and reduce new investment, the devil goes further downward. It's an vicious circle.

  • 8 years ago

    CPI decline can be best stimulated by raising interest rates and taxes, also by decreasing wages .

    Less money in hands of people and lure of high gains of investing makes them spend less.

    So, demand decreases and prices come down.

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