The highest interest rates in the world are found in countries
A) that have followed a monetary policy that is highly restrictive.
B) with governments that have run large budget surpluses.
C) with governments that have run sizable budget deficits.
D) that have followed an expansionary monetary policy that resulted in high rates of inflation.

Question

Quizplus · Accepted Answer

Countries with high interest rates typically have a history of high inflation rates, which often result from an expansionary monetary policy. To combat inflation, the government may raise interest rates to make borrowing more expensive and slow down spending. Therefore, the correct answer is D.

The Highest Interest Rates in the World Are Found in Countries