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Restrictive monetary policy is designed to curtail aggregate demand and to overcome________

Economics
JAMB 2019

Restrictive monetary policy is designed to curtail aggregate demand and to overcome________

  • A. Deflation
  • B. Reinflation
  • C. Disinflation
  • D. Inflationary gap
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Correct Answer: Option D
Explanation

Restrictive monetary policy which is also known as contractionary monetary policy is used to increase interest rate and reduce investment so as to control inflation in an economy.

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