If an economy is suffering from a fall in demand that caused deflation and if the central bank refused to provide a stimulus needed to raise aggregate...

There are
two ways in which the government can stimulate economic growth when there is a recession:
monetary and fiscal policy. Monetary policies are usually implemented by the central bank while
fiscal policies are used by the government.

In this case, the central bank
refuses to get involved, meaning that the government has no choice but to implement expansionary
fiscal policies. The government can increase aggregate demand by offering tax cuts. If the
government lowers the amount of tax that citizens and businesses pay, the economy will have more
disposable income. People will have an incentive to spend because they have more money in their
pockets. Businesses will hire more people because their profits have increased.

The government can also increase aggregate demand by spending more money on the
economy. Since the government budget can be limited, they may have to borrow money to fund the
extra spending. The government can either borrow from other countries or it can issue bonds to
local investors. The borrowed money is then used on infrastructure projects that create
employment and stimulate aggregate demand. Suppliers get business from the government, which
buys construction materials from them.

The government will implement the
expansionary fiscal policy up to the point where aggregate demand and supply are in equilibrium.
From there, free-market forces take control of the economy.