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ECONOMICS
Monetary Policy
Price Stability
Price stability is crucial for sustainable economic growth and is targeted by central banks worldwide
20 Jan 2026
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Why is deflation considered inconsistent with the goal of price stability by central banks like the ECB?
Because deflation leads to uncontrollable hyperinflation.
Because deflation can increase the real burden of debt and reduce consumer spending, harming economic growth.
Because deflation causes immediate increases in employment and wages.
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