Which would be the appropriate monetary policy and goal during a period of high inflation? A) Increase interest rates in order to increase the money supply. B) Decrease interest rates in order to decrease the money supply. C) Increase interest rates in order to decrease the money supply. D) Decrease interest rates in order to increase the money supply.
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c and d options are correct
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The appropriate monetary policy and goal during a period of high inflation is (D) Decrease interest rates in order to increase the money supply.
The goal of a contractionary policy is to decrease the money supply within an economy by lessening bond prices and increasing interest rates.
Reducing spending is significant during inflation, because it helps in halting economic growth and, in turn, the rate of inflation
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