A tight monetary policy does all of the following,except

A) raise interest rates.
B) drive up the dollar relative to foreign currencies.
C) raise net exports.
D) increase imports.

Question

A tight monetary policy does all of the following,exceptA) raise interest rates.B) drive up the dollar relative to foreign currencies.C) raise net exports.D) increase imports.

Ankit Verma · Accepted Answer

Final Answer : C, Explanation :  A tight monetary policy typically involves raising interest rates to control inflation, which can lead to a stronger domestic currency (making imports cheaper and exports more expensive) and thus, contrary to option C, would likely decrease net exports rather than increase them.

A tight monetary policy does all of the following,except

A) raise interest rates.
B) drive up the dollar relative to foreign currencies.
C) raise net exports.
D) increase imports.

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Learning Objectives

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