If the monetary authority wished to follow a restrictive monetary policy, it would buy government securities in the open market.

Question

Quizplus · Accepted Answer

If the monetary authority wished to follow a restrictive monetary policy, it would sell government securities in the open market, not buy them. This reduces the amount of money in circulation and increases interest rates, making it more difficult to borrow and spend money.

If the Monetary Authority Wished to Follow a Restrictive Monetary