Monetary Stimulus Will Fail If

question 84

Multiple Choice

Monetary stimulus will fail if

• A)Banks lend too much money.
• B)Short-term interest rates are affected but long-term interest rates are not.
• C)Consumers spend too much money,creating a shortage of money.
• D)Lower interest rates cause households to not refinance mortgages and not apply for new consumer loans.

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Definitions:

Restrictive Policy

A policy designed to limit or control certain actions, often used in the context of monetary or fiscal policy to control inflation or regulate the economy.

Frequent Cash-Outs

Regular transactions where cash is withdrawn from a company's account, potentially affecting its liquidity or cash reserves.

Restrictive Policy

A financial policy or strategy that aims to limit credit expansion and investment, often to curb inflation or stabilize economic growth.

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs for a production process for manufacturing goods.