In dealing with a recessionary gap 18 to 24 months in the future, monetary policy is like "taking away the punch bowl just when the party is getting started."

Question

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This phrase is typically used to describe contractionary monetary policy, which is applied to cool down an overheating economy, not to address a recessionary gap. To address a recessionary gap, expansionary monetary policy would be used to stimulate the economy.

In Dealing with a Recessionary Gap 18 to 24 Months