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The fiscal and monetary policy can be used to stabilise the economy. Which one of the following statements is INCORRECT? Select one: OA. When expansionary
The fiscal and monetary policy can be used to stabilise the economy. Which one of the following statements is INCORRECT? Select one: OA. When expansionary fiscal policy is implemented, the ZZ curve will swivel upwards in the goods market, and the level of output and income will increase. OB. In our financial market model, implementing an expansionary monetary policy by the central bank will shift the LM curve downwards because the lower interest rate on bank loans to clients will increase demand deposits and the quantity of money increases. O C. Contractionary fiscal policy means that if a budget deficit occurs in the economy, implementing contractionary fiscal policy will decrease the budget deficit. OD. Implementing a contractionary monetary policy will increase the repo rate in the financial market; thus, this increase in the interest rate increases the cost of credit in the economy-consequently, the demand for and the quantity of money decrease
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