Which of the Following Is Not a Reason That a Stimulative

question 2

Multiple Choice

Which of the following is not a reason that a stimulative monetary policy may be ineffective?

• A) The effects of a stimulative policy may be disrupted by expectations of inflation.
• B) Retirees who rely on interest income may restrict their spending
• C) Lending institutions may increase their standards for borrowers, so some potential borrowers may not qualify for loans.
• D) Higher interest rates encourage individuals to increase their savings.

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