Which is a monetary policy that would be useful in stopping deflation?

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1144858

2026-03-18 09:05

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A useful monetary policy to combat deflation is lowering interest rates. By reducing interest rates, borrowing becomes cheaper, encouraging businesses and consumers to spend and invest more. This increased demand can help raise prices and stimulate economic activity, counteracting deflationary pressures. Additionally, central banks can implement quantitative easing to inject liquidity into the economy, further supporting growth and inflation.

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