(a) In times of deflation, consumption is more cost-effective. Deflation is caused by the decrease of currency circulating in the market, the decline of people's monetary income and purchasing power, and the impact of falling prices. Deflation refers to the continuous decline in prices, wages, interest rates, food and energy due to overcapacity or insufficient demand. Because the prices of various commodities during the period of deflation mean that the same amount of money can buy more consumer goods or services, which is more cost-effective. Inflation means rising prices, and the same amount of money can buy more consumer goods or services.

(2) Investment in industry is unfavorable to individuals in the case of inflation or deflation. During the period of deflation, due to the decline of social purchasing power and weak total market demand, deflation has a restraining effect on the investment industry. In the case of inflation, due to the high price level, the cost of investing in industry will increase accordingly. At the same time, in order to improve the balance between money and commodities, the state may introduce policies to curb investment, which will limit investment. However, when inflation or deflation occurs, not all investments are unfavorable, and investors' investment focus can change according to the changes of inflation or deflation. When deflation occurs, because deflation means the decline of real interest rate, bond assets can gain capital gains, and investors can choose to increase investment in bond products; When inflation occurs, investors can continuously reduce their investment in risks and increase their investment in certain products, especially hard currency.