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Bernardo de La Paz

(51,267 posts)
11. Prices decrease in Depressions. You don't want that
Mon Dec 9, 2024, 12:09 PM
Dec 9

In Depressions, cash is king and people buy much less and conserve cash. Thus the economy declines and prices decline to stimulate demand. Central banks reduce the cost of borrowing greatly.

Lobby for Canada re tariffs: https://www.democraticunderground.com/100219804157

Initially tariffs increase prices, but after a while the decreased demand causes prices to fall. However there are limits to profitability below which prices can't fall.

Restoring lower / zero tariff levels (after a tariff increase) would decrease prices somewhat but if they have already tumbled they might not decrease much.

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