#firstdealofthenewyearastylz Inflation and deflation have distinct economic impacts. Inflation reduces purchasing power, creates uncertainty, and can benefit borrowers but harm savers, although moderate inflation can stimulate economic growth. Deflation, on the other hand, reduces spending, increases debt burden, and can lead to economic contraction, stagnation, and unemployment. Understanding these impacts is crucial for policymakers, businesses, and individuals to make informed decisions, as central banks adjust interest rates, companies adjust pricing and production, and individuals change spending habits in response to inflation or deflation expectations.