Restrictive monetary policies are most likely to be used by the central bank when an economy faces:
A)a high rate of inflation.
B)a high rate of unemployment.
C)a recession.
D)a negative GDP gap.

Question

Quizplus · Accepted Answer

Restrictive monetary policies such as raising interest rates and reducing the money supply are designed to reduce inflationary pressures in the economy.

Restrictive Monetary Policies Are Most Likely to Be Used by the Central