SOLUTIONS TO CURBING DEFLATION

  1. The Central Bank can lower its interest rates, reducing liquidity/cash ratio
  2. Workers salaries and wages can be increased. 
  3. Buying of securities and treasury bills in the open market should be encouraged.
  4. Budgeting for a deficit. 
  5. Central bank should also encourage commercial banks in granting loans
  6. Reduction of taxes.

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