1. Rising Prices: Inflationary economies experience a sustained increase in the overall price level of goods and services.

2. Decreasing Purchasing Power: As prices rise, the purchasing power of currency declines, leading to a reduction in the quantity of goods and services that can be purchased with the same amount of money.

3. Demand-Pull Inflation: Inflation may be driven by excessive demand for goods and services relative to their supply, resulting in upward pressure on prices.

4. Cost-Push Inflation: Inflation may also result from increases in production costs, such as wages, raw materials, or energy prices, which are passed on to consumers through higher prices.

5. Monetary Policy Response: Central banks may employ contractionary monetary policies, such as raising interest rates or reducing the money supply, to combat inflation and stabilize prices.

1. Hyperinflation in Zimbabwe: In the late 2000s, Zimbabwe experienced hyperinflation, with annual inflation rates exceeding billions of percent. The rapid expansion of the money supply, coupled with political instability and economic mismanagement, led to a collapse in the value of the Zimbabwean dollar.

2. Moderate Inflation in the United States: The United States typically targets a moderate inflation rate of around 2% per year. This low but steady inflation rate is often seen as conducive to economic growth and stability, as it encourages consumer spending and investment.

1. Falling Prices: Deflationary economies experience a sustained decrease in the overall price level of goods and services.

2. Increasing Purchasing Power: While falling prices may initially benefit consumers by increasing their purchasing power, deflation can also have adverse effects on economic growth, employment, and investment.

3. Demand-Side Deflation: Deflation may be caused by weak consumer demand, leading to excess supply and downward pressure on prices.

4. Supply-Side Deflation: Deflation may also result from improvements in productivity and efficiency, which reduce production costs and lead to lower prices.

5. Monetary Policy Challenges: Central banks may face challenges in combating deflation, as conventional monetary policy tools, such as lowering interest rates, may become ineffective when interest rates approach zero.

1. The Great Depression: The 1930s Great Depression is a notable example of a deflationary period characterized by falling prices, widespread unemployment, and economic contraction. Weak consumer demand, coupled with financial instability and bank failures, contributed to the deflationary spiral.

2. Japan's Lost Decade: Japan experienced a prolonged period of deflation in the 1990s and early 2000s, known as the "Lost Decade." The bursting of Japan's asset price bubble led to a period of economic stagnation, falling prices, and low consumer spending.