Economics · Monetary Policy
With respect to monetary policy, which of the following statements is INCORRECT?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The contractionary policy decreases the total supply of money in the economy by increasing interest rates.
- 2There are two primary types of monetary policy: expansionary policy and contractionary policy.
- 3The expansionary policy works by increasing the total supply of money in the economy.
- 4The contractionary policy boosts economic activity during slowdowns or recessions.✓
Correct answer
The contractionary policy boosts economic activity during slowdowns or recessions.
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