Eurozone Slides Into Deflation for the First Time in Four Years Deflation occurred in 12 of the
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Eurozone Slides Into Deflation for the First Time in Four Years Deflation occurred in 12 of the 19 eurozone countries in August. Analysts blamed the fall in part on lower oil prices and the delay of heavily discounted summer clothing sales in France, Italy, and Belgium from July until August.
a. Explain the process by which deflation occurs.
b. How might Europe boost its aggregate demand?
Might the boost to aggregate demand create demand-pull inflation?
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