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8a. What is deflation? (1 mark)? 8b. Assume you are a policymaker. What would be the appropriate policy response if there were to be deflation?

8a. What is deflation? (1 mark)?

8b. Assume you are a policymaker. What would be the appropriate policy response if there were to be deflation? In your answer, refer to both monetary policy and fiscal policy (4 marks).

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