An active (countercyclical) monetary policy that attempts to smooth out the busi
ID: 1210808 • Letter: A
Question
An active (countercyclical) monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions.
contractionary; contractionary
expansionary; expansionary
countercyclical; expansionary
contractionary; expansionary
expansionary; contractionary
A.contractionary; contractionary
B.expansionary; expansionary
C.countercyclical; expansionary
D.contractionary; expansionary
E.expansionary; contractionary
Explanation / Answer
An active (countercyclical) monetary policy that attempts to smooth out the business cycle would involve conducting CONTRACTIONARY monetary policy during recessions and EXPANSIONARY monetary policy during expansions.
Option D. Contractionary ; Expansionary
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