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Contractionary monetary policy causes the ?a. amount of government spending to increase. b. dollar value of real gdp to increase. c. price level to increase. d. interest rate to increase.

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tutorconsortium344

The right answer is D (Interest rate to increase)

Contractionary monetary policy

In order to counteract inflation, a type of monetary policy known as a contractionary monetary policy seeks to reduce the rate of monetary expansion. An increase in inflation is the primary indicator of an overheated economy, which can be brought on by extended periods of economic expansion.

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