Assume that policy mix A combines restrictive monetary policy with expansionary fiscal policy, while policy mix B combines expansionary monetary policy with restrictive fiscal policy.Compared to policy mix B, policy mix A will cause

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Policy mix A, which combines restrictive monetary policy with expansionary fiscal policy, typically leads to higher interest rates due to the tighter monetary policy. Higher interest rates, in turn, discourage borrowing and can lead to a lower level of investment, as it becomes more expensive for businesses to finance new projects or expansion.

Assume That Policy Mix a Combines Restrictive Monetary Policy with Expansionary