Use accommodating monetary policy

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Reference no: EM13836923

If the central bank (Federal Reserve in case of USA) does not use accommodating monetary policy, a fiscal stimulus is likely to increase interest rates, which in turn will cause planned investment to decrease. What is this sequence of events called? Your answer is------

A. crowding out hypothesis

B. Demand-pull inflation hypothesis

C. natural rate hypothesis

D. structural unemployment hypothesis

Reference no: EM13836923

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