The Fed uses____ monetary policy to cause the economy to grow slower in the short run.A(n)_____ In the money supply is an example of such a policy.

Question

Quizplus · Accepted Answer

The Fed's contractionary monetary policy aims to slow down the economy by decreasing the money supply, which leads to higher interest rates and less borrowing/spending. Therefore, the correct choice is D - contractionary; a decrease.

The Fed Uses____ Monetary Policy to Cause the Economy to Grow