Final answer:
Deflation occurs when money becomes worth more over time instead of having less purchasing power. Disinflation refers to a decrease in the rate of price increase.
Step-by-step explanation:
Deflation occurs when the rate of inflation is negative, meaning that money is worth more over time instead of having less purchasing power like in inflation. It can make it difficult for monetary policy to address a recession. Disinflation, on the other hand, refers to a decrease in the rate of inflation, meaning that prices are still rising but at a slower rate. While deflation and disinflation both involve a decrease in the rate of inflation, deflation is characterized by negative inflation while disinflation is a decrease in the rate of price increase.