In the short run, tight monetary policy can:
A) spur economic growth.
B) adversely affect net exports.
C) exacerbate inflation.
D) promote net exports.
E) All of these answers are correct.

Question

Quizplus · Accepted Answer

Tight monetary policy typically leads to higher interest rates, which can appreciate the domestic currency and make exports more expensive, thus adversely affecting net exports.

In the Short Run, Tight Monetary Policy Can