What Effect Does Restrictive Monetary Policy Have on Short-Term Real

question 165

Multiple Choice

What effect does restrictive monetary policy have on short-term real interest rates?

• A) Restrictive monetary policy tends to push short-term interest rates upward.
• B) Restrictive monetary policy tends to push short-term interest rates downward.
• C) The effect of restrictive monetary policy on short-term interest rates is unpredictable.
• D) Restrictive monetary policy has no effect on short-term interest rates.