Tight monetary policy and easy fiscal policy lead to

Name: Tight monetary policy and easy fiscal policy lead to
Brand: Quizplus
Rating: 4.9 (46 reviews)

Question

Quizplus · Accepted Answer

Tight monetary policy reduces the money supply and increases demand for money, leading to higher interest rates. Easy fiscal policy increases government spending and reduces taxes, increasing aggregate demand and potentially leading to inflation, which also increases interest rates. Therefore, both policies together would result in high real interest rates.

Tight Monetary Policy and Easy Fiscal Policy Lead to