If the Economy Experiences an Inflationary Gap, a Contractionary Monetary

question 107

Multiple Choice

If the economy experiences an inflationary gap, a contractionary monetary policy will

• A) increase interest rates and increase exchange rates.
• B) increase interest rates and decrease exchange rates.
• C) decrease interest rates and increase exchange rates.
• D) decrease interest rates and decrease exchange rates.

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Definitions:

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A decrease in quantity, quality, or level of something over time.

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Physical activity of moderate intensity that improves health and fitness without excessive strain or risk of injury.