Other Things Equal, a Restrictive Monetary Policy During a Period

question 38

Multiple Choice

Other things equal, a restrictive monetary policy during a period of demand-pull inflation will

• A) lower the interest rate, increase investment, and reduce net exports.
• B) lower the price level, increase investment, and increase aggregate demand.
• C) increase productivity, aggregate supply, and real output.
• D) increase the interest rate, reduce investment, and reduce aggregate demand.

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