The main objective of contractionary monetary policy is to:
A) decrease aggregate demand.
B) close a recessionary gap.
C) increase investment.
D) raise the level of potential output.

Question

Quizplus · Accepted Answer

The main objective of contractionary monetary policy is to decrease aggregate demand, which leads to lower inflationary pressures and a more stable economic environment. This can be achieved through actions such as increasing interest rates or reducing the money supply.

The Main Objective of Contractionary Monetary Policy Is To