Question

COVID-19 has had a deflationary impact on Canadian prices. Discuss supporting your argument with facts and figures.

Answer 1

Answer - The inflation rates in Canda have almost become negative and dropped down to lowest of -0.4 % . This condition of negative inflation is called deflation. There has been a 30 % fall in the price of gasoline in Canada as compared to the rest of the world due to decreased demand for oil. This fall in the price of gasoline has decreased the cost of operating. Transportation , clothing and other expenses have become very cheap thus signalling the deflationary conditions. The sectors in which the prices have been rising are very very slow in the growth. All these factors point towards the economy that has entered into the deflationary phase. But it carries and optimistic view regarding the future and prices of some commodities have started to rise .