The expected effects of a tighter monetary policy are
A)lower real interest rates.
B)exchange rate depreciation.
C)lower inflation.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The expected effects of tighter monetary policy are lower inflation due to reduced money supply, which causes higher interest rates and a decrease in demand for goods and services. Lower real interest rates (A) and exchange rate depreciation (B) are associated with loose monetary policy.

The Expected Effects of a Tighter Monetary Policy Are