Question

What is dear money policy implies?

Answer 1

An policy in which a legislature decreases the measure of cash being spent in an economy by raising loan costs, making it progressively costly to get cash.

It suggests fund and financial matters of an administration approach that makes it costly to get cash, utilized as a method for diminishing the measure of cash being spent in a nation .

Answer 2

Dear money policy also known as tight money policy. In this policy government reduces the amount of money being spent in the economy.

Government do it by increasing the interest rates in banks that is very hard to obtain. The objective of this policy is to counter inflation.

The central bank's dear money policy has put the brakes on growth in capital goods output and led to economic regression. It is opposite of easy money that can borrow easily on very low rates.