Since World War II, contractionary monetary policy changes have had
A)a larger impact on the output of small manufacturing firms than on the output of large manufacturing firms.
B)a larger impact on the output of large manufacturing firms than on the output of small manufacturing firms.
C)about the same negative impact on the output of both large and small manufacturing firms.
D)about the same positive impact on the output of large and small manufacturing firms.

Question

Quizplus · Accepted Answer

Contractionary monetary policy, which typically involves increasing interest rates to reduce inflation, can have a more significant impact on small manufacturing firms than on large ones. This is because small firms often have less access to capital and are more sensitive to changes in borrowing costs. Large firms, on the other hand, may have more resources and diversified financing options to weather the effects of higher interest rates.

Since World War II, Contractionary Monetary Policy Changes Have Had