During disinflation, stock prices tend to go up because the investor's required rate of return goes down.

Name: During disinflation, stock prices tend to go up because the investor's required rate of return goes down.
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During disinflation, the central bank reduces the money supply, which decreases inflation and drives down interest rates. As a result, investors' required rate of return goes down, making stocks more attractive and driving up stock prices.

During Disinflation, Stock Prices Tend to Go Up Because the Investor's