The flow of capital throughout the economy can affect inflation and deflation by influencing the level of economic activity. When the Federal Reserve lowers interest rates, it encourages borrowing and investment, which can stimulate economic growth and potentially lead to inflation. Conversely, when the Federal Reserve raises interest rates, it can discourage borrowing and investment, slowing economic growth and potentially leading to deflation.
Economics can be intimidating to the person who is not well-versed in business and mathematics. This...
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