If the economy experiences an inflationary gap, a contractionary monetary policy will
A) increase interest rates and increase the bond prices.
B) increase interest rates and decrease the bond prices.
C) decrease interest rates and increase the bond prices.
D) decrease interest rates and decrease the bond prices.
Ans: B) increase interest rates and decrease the bond prices.
Economics
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Consumer surplus is the
A) value of a good expressed in dollars. B) price of a good expressed in dollars. C) value of a good minus the price paid for it summed over the quantity bought. D) value of a good plus the price paid for it summed over the quantity bought.
Economics
The present value of $300 received 5 years in the future would be calculated as which of the following when the interest rate is 5%?
A) 300/(1.5)5 B) 5.05/300 C) 300/(1.05)5 D) 300 × 1.5 × 5
Economics