Tight monetary policy refers to the Fed:
A) raising interest rates,usually to fight inflation.
B) buying bonds to pull reserves from the banking system.
C) increasing excess reserves to bring the economy to full employment.
D) selling bonds to bring the economy to full employment.

Question

Quizplus · Accepted Answer

Tight monetary policy refers to the Fed raising interest rates in order to control inflation. This restricts borrowing and spending, which slows down economic growth and reduces inflationary pressure.

Tight Monetary Policy Refers to the Fed