In the cause-effect chain, a restrictive monetary policy increases the money supply, decreases the interest rate, increases investment spending, and increases aggregate demand.

Question

Quizplus · Accepted Answer

A restrictive monetary policy is characterized by a decrease in the money supply, an increase in the interest rate, and a decrease in investment spending, leading to a decrease in aggregate demand. Therefore, the statement is false.

In the Cause-Effect Chain, a Restrictive Monetary Policy Increases the Money