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.

---

Definitions:

Required Rate

This term might be understood in different contexts; however, in finance, it often refers to the minimum return that investors expect to earn on an investment.

Transistor

A semiconductor device used to amplify or switch electronic signals, forming the foundation of modern electronic devices.

Output Terminal

The point in an electrical device or circuit where output is taken out or transferred to another circuit or component.

Emitter

A device or component that releases or sends out something such as energy, signals, or substances.