Contractionary Monetry Policy Flashcards by Anna-mai Smith | Brainscape

Q

What changes

A

Interest rates up

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Q

What curve moves

A

Ad moves left or decreases

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Q

Why does ad decrease

A

C down- loans, saving, mortgage

I down- loans

£ up- inflow of hot money

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Q

What are positive outcomes

A

Inflation down

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Q

What are negative outcomes

A

Growth down,
Unemployment up,
BOP worse

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Q

What are evaluation points

A

How much,
Cerberus paribus,
Spare capacity

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