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Policy that raises interest rates and reduces borrowing is described as:
AConversational
BContractionary
CConstructional
DConfectionary
Answer & Solution
Correct answer: B. Contractionary
1. Dearer credit discourages spending.
2. That pulls demand back.
3. Such policy is contractionary.
_Source: OpenStax Principles of Economics 3e, Chapter 28, Monetary Policy and Bank Regulation._
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