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When recessions begin, central banks and other monetary authorities can reduce their interest rates as a way to stimulate economic activity in the country. Although
When recessions begin, central banks and other monetary authorities can reduce their interest rates as a way to stimulate economic activity in the country. Although we usually expect interest rates to be positive, banks can set interest rates to negative values so that deposits decline over time rather than grow. Some economists have proposed using negative interest rates as a way to encourage people to spend money now to support the economy rather than saving the funds for the future. Do you think this is fair? Would you be more likely to spend money rather than save it if the interest rate on bank deposits were negative
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