A Contractionary Monetary Policy Combined with an Expansionary Fiscal Policy

question 70

Multiple Choice

A contractionary monetary policy combined with an expansionary fiscal policy will lead to

• A)an increase in output and an ambiguous effect on the interest rate.
• B)an increase in output and an increase in the interest rate.
• C)an ambiguous effect on output and an increase in the interest rate.
• D)an ambiguous effect on output and an ambiguous effect on the interest rate.

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