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Deflation is bad for the economy because it can lead to decreased consumer spending, lower business profits, and increased debt burdens. This can result in job losses, reduced investment, and overall economic stagnation. Various sectors, such as retail, real estate, and manufacturing, may be negatively impacted by deflation as demand for goods and services decreases. Stakeholders, including consumers, businesses, and government, may face challenges such as lower incomes, declining asset values, and difficulty in repaying debts.

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