Assume We Combine Restrictive Monetary Policy with Expansionary Fiscal Policy

Assume we combine restrictive monetary policy with expansionary fiscal policy.Which is most likely to occur?

A) unemployment and interest rates will both go down
B) unemployment will go down but interest rates will stay the same
C) investment and consumption will both increase
D) interest rates and the budget deficit will both decrease
E) investment will decrease and the budget deficit will increase

Correct Answer:

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