Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

Which policy adopted by a central bank is an example of contractionary monetary policy?

  • Aa reduction in the interest rate at which it will lend to banks
  • Ba reduction in the minimum cash to deposit ratios of banks
  • Cthe purchase of foreign currency to influence the country’s exchange rate
  • Dthe sale of government bonds in the open market

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