What is the term for the rate at which the price for goods and services decreases over time?

The term that defines the rate at which the price for goods and services decreases over time is deflation. Deflation occurs when there is a general decline in prices, which can be caused by a decrease in the supply of money or credit, increased productivity, or a surplus of goods and services in relation to demand.

When deflation happens, the purchasing power of currency tends to increase, meaning that consumers can buy more with the same amount of money. This can lead to various economic effects, such as delaying purchases by consumers who expect prices to fall further, which can then impact business revenues and investments.

Inflation refers to the opposite phenomenon, where prices increase over time, eroding purchasing power. Recession involves a significant decline in economic activity across the economy, typically characterized by falling GDP, rising unemployment, and decreasing consumer spending, but it does not inherently denote a change in price levels. Depreciation typically refers to the reduction in value of an asset over time, particularly in the context of fixed assets and financial assets, rather than the general price level of goods and services.

Understanding these terms and their implications can help in analyzing economic conditions and making informed financial decisions.