Which of the following statements correctly describes an anti- inflationary monetary policy?

Question

Quizplus · Accepted Answer

An anti-inflationary monetary policy involves actions taken by a central bank, such as the Bank of Canada, to decrease inflation or prevent it from rising too high. Increasing the overnight loans rate (also known as the key interest rate) is a common tool used to slow down spending and discourage borrowing, which can reduce the demand for goods and services and help decrease inflation. Therefore, choice D is the correct statement as increasing the overnight loans rate would lead to less lending and less consumer spending, which is an anti-inflationary monetary policy.

Which of the Following Statements Correctly Describes an Anti- Inflationary