To eliminate inflationary pressures in the economy, the traditional views holds

Question

To eliminate inflationary pressures in the economy, the traditional views holds that the monetary authority should seek to (increase, decrease) _______ the reserves of commercial banks; this would tend to (increase, decrease) ________ the money supply and to (increase, decrease) ________ the rate of interest. This in turn would cause investment spending, aggregate demand, and GDP to (increase, decrease) _______. This action by monetary authorities would be considered a(n) (easy, tight) ________ money policy.

Explanation / Answer

decrease increase decrease increase easy

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