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satela [25.4K]
3 years ago
8

In the short run, contractionary monetary policy _________ real gross domestic product (GDP), _________ unemployment, and ______

___ the price level. a. lowers; lowers; raises b. lowers; raises; lowers c. raises; lowers; lowers d. raises; raises; raises e. raises; lowers; raises
Business
2 answers:
cestrela7 [59]3 years ago
6 0

Answer:

In the short run, contractionary monetary policy <u>LOWERS</u> real gross domestic product (GDP), <u>RAISES</u> unemployment, and <u>LOWERS</u> the price level.

  • b. lowers; raises; lowers

Explanation:

When the Fed carries out a contractionary monetary policy, it will increase interest rates sell more securities in order to lower the money supply in the economy. Higher interest rates should lower the inflation rate (general price level), but it also cools down the economy which increases unemployment.

Ahat [919]3 years ago
4 0

Answer: b. lowers; raises; lowers

Explanation:

Lowers; Raises; Lowers

contractionary monetary policy refers to the central bank reducing or decreasing the supply of money in the economy. A decrease in the supply of money <u>lowers</u> real Gross domestic product because Nominal Gross domestic product decreases, unemployment will <u>raise</u> and Prices will <u>fall</u> because the economy remains with less capital.

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