Unanticipated restrictive monetary policy would tend to cause
A) real interest rates to rise.
B) the exchange rate value of the dollar to fall (the dollar to depreciate).
C) loans to become more available for small businesses.
D) asset prices to rise.

Question

Quizplus · Accepted Answer

Unanticipated restrictive monetary policy would tend to cause real interest rates to rise because when the supply of money is decreased, lenders will be less willing to lend money and borrowers must offer higher interest rates to compete for the limited amount of funds available.

Unanticipated Restrictive Monetary Policy Would Tend to Cause