The policy mix of an expansionary monetary policy and a contractionary fiscal policy will lead to a decrease in the interest rate.

Question

Quizplus · Accepted Answer

An expansionary monetary policy typically involves lowering interest rates to stimulate economic activity, while a contractionary fiscal policy may not directly affect interest rates. The net effect is often a decrease in interest rates due to the monetary policy's influence.

The Policy Mix of an Expansionary Monetary Policy and a Contractionary