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Quadrillian
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Quadrillian asked in Social ScienceEconomics · 5 years ago

How does negative interest rates encourage inflation? I don't see the connection.?

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  • Anonymous
    5 years ago
    Favorite Answer

    If you deposit your money and pay the bank the interest to keep your money is okay for you, economics won't work anymore. But if people are rational, they will not keep the money, but buy things. now the multiplier is at work. If AD shifts right, it will be an inflation.

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