The deflationary spiral is used economically to describe a situation whereby production lowers because of lowering prices. This then decreases wages and subsequently the demand for goods and services. Then prices drop even further. By definition deflationary spiraling is a vicious circle whereby deflation enters the economy and it spiral downward out of control. This is one of the speculated caused of the Great Depression, where each reaction caused further problems and each one was interlinked. In modern terms of macroeconomics, a deflationary spiral is similar to the occurrences of the Industrial Revolution. Known as the glut controversy, people became gluttonous, as well as those of the lower levels.

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