To combat inflation, what is the usual monetary policy stance adopted?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. Hawkish
- Hawkish monetary policy refers to an aggressive monetary policy implemented by a nation's central bank when it wants to contract financial liquidity.
- The purpose of implementing Hawkish policy is to maintain healthy employment levels, and minimize rising prices, thus avoiding recession.