Everything else held constant,an expansionary ________ policy will cause the interest rate to rise,while an expansionary ________ policy will cause the interest rate to fall.
A)monetary;monetary
B)monetary;fiscal
C)fiscal;monetary
D)fiscal;fiscal

Question

Quizplus · Accepted Answer

An expansionary fiscal policy, which involves increased government spending or decreased taxes, typically leads to higher interest rates as the government borrows more. An expansionary monetary policy, which involves increasing the money supply, usually leads to lower interest rates as it encourages lending and investment.

Everything Else Held Constant,an Expansionary ________ Policy Will Cause the Interest