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Answer the following questions about deflationary traps. Describe a deflationary trap. What policies would be appropriate to get out of a deflationary trap? What effects

  1. Answer the following questions about deflationary traps.
    1. Describe a deflationary trap.
    2. What policies would be appropriate to get out of a deflationary trap?
    3. What effects would contractionary policies (either fiscal or monetary) have on an economy in a deflationary trap?

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