Contractionary monetary policy is used to
ECONOMICS
JAMB 2008
Contractionary monetary policy is used to
- A. control inflation
- B. bridge the deflationary gap
- C. expand the output level
- D. deregulate the economy
Correct Answer: A. control inflation
Explanation
Contractionary monetary policy is when central banks raise interest rates and reduce the money supply to avoid inflation. The goal is to reduce inflation by limiting the amount of active money circulating in the economy.
Post an Explanation Or Report an Error
If you see any wrong question or answer, please leave a comment below and we'll take a look. If you doubt why the selected answer is correct or need additional more details? Please drop a comment or Contact us directly. Your email address will not be published. Required fields are marked *