top of page
Economics explained
Category:
Policies to correct deflation
Policies to correct deflation
The secret to scoring awesome grades in economics is to have corresponding awesome notes.
A common pitfall for students is to lose themselves in a sea of notes: personal notes, teacher notes, online notes textbooks, etc... This happens when one has too many sources to revise from! Why not solve this problem by having one reliable source of notes? This is where we can help.
What makes TooLazyToStudy notes different?
Our notes:
-
are clear and concise and relevant
-
is set in an engaging template to facilitate memorisation
-
cover all the important topics in the O level, AS level and A level syllabus
-
are editable, feel free to make additions or to rephrase sentences in your own words!
Looking for live explanations of these notes? Enrol now for FREE tuition!
Policymakers attempt to solve deflation by making use of fiscal policy and monetary policy.
Deflation is a general decline in prices for goods and services and can be a serious economic problem.
Expansionary fiscal policy can help to solve the problem of deflation as it puts more money into consumers' and producers' hands to give them more purchasing power. It is designed to increase aggregate demand. This can be achieved in two ways.
Government spending can be increased.
The government can cut tax rates.
Expansionary monetary policy is intended to increase aggregate demand by
a cut in the interest rate
an increase in the money supply
a reduction in the foreign exchange rate.
bottom of page