An anti-inflationary monetary policy results in
A) lower output in the short run and lower inflation in the long run.
B) lower inflation in the short run and lower output in the long run.
C) lower output in both the short run and the long run,and lower inflation only in the long run.
D) lower inflation in both the short run and the long run,and lower output only in the long run.
E) no change in output in the short run and lower inflation in the long run.

Question

Quizplus · Accepted Answer

An anti-inflationary monetary policy typically involves raising interest rates, which can reduce output in the short run due to decreased spending and investment. However, in the long run, it can lead to lower inflation as the economy adjusts.

An Anti-Inflationary Monetary Policy Results in