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17 November, 19:22

16. What monetary policy should be implemented to correct an inflationary economy?

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  1. 17 November, 19:30
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    tight monetary policy
  2. 17 November, 20:54
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    Answer: Contractionary monetary policy

    Explanation: Contractionary monetary policy should be implemented to correct an inflationary economy.

    As a method of contolling inflation, contractionary monetary policy aims at reducing the circulating money supply within an economy. Consequently,

    to achieve this, bond prices are reduced and interests rates increased.
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