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Economic stimulus is a set of financial measures taken by central bankers and government lawmakers with the aim of improving, or “stimulating,” an economy that’s slowing or in danger of a recession. They use a combination of fiscal and monetary policies, including cutting interest rates, increasing government spending, and purchasing assets like bonds to push down how much it costs to borrow money. These types of strategies are designed to increase demand and improve the overall economy by increasing consumption, which leads to greater production and hiring. Whether or not the economic stimulus measures succeed is dependent on their timing, size, and how they are executed. Many economists believe that if the fiscal or monetary stimulus is too large or lasts too long, it can lead to inflation and higher interest rates, which can be counterproductive in the long run. However, if the stimulus is small and targeted at key sectors of the economy, it can help stimulate growth in those areas and provide multiplier effects that boost consumer demand.