➤ When can central bank actions restore money supply and when might they fall short?
Central bank liquidity injections, open-market operations, and lender-of-last-resort loans can restore money supply quickly if problems are mainly liquidity-driven. They fall short when many banks are insolvent, when interbank trust collapses, or when households strongly prefer cash. In those cases, recapitalization, deposit guarantees, or fiscal support are also required to rebuild credit flows.
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