The goal of contractionary monetary policy is to:
A) reduce interest rates to stimulate the economy.
B) increase interest rates to stimulate the economy.
C) reduce interest rates to slow down the economy.
D) increase interest rates to slow down the economy.

Question

Quizplus · Accepted Answer

The goal of contractionary monetary policy is to decrease the money supply, increase interest rates, and therefore slow down the economy. This can help control inflation by reducing demand for goods and services, which can lead to a decrease in prices.

The Goal of Contractionary Monetary Policy Is To