question 4 of 6\nwhat should the central bank do to implement contractionary policy?\nincrease government…

question 4 of 6\nwhat should the central bank do to implement contractionary policy?\nincrease government spending.\ndecrease taxes.\ndecrease interest rates.\nincrease interest rates.

question 4 of 6\nwhat should the central bank do to implement contractionary policy?\nincrease government spending.\ndecrease taxes.\ndecrease interest rates.\nincrease interest rates.

Answer

Brief Explanations:

Contractionary policy aims to reduce the money - supply and slow economic growth. Increasing government spending and decreasing taxes are expansionary fiscal policies. Decreasing interest rates makes borrowing cheaper and stimulates spending, which is expansionary. Increasing interest rates makes borrowing more expensive, reducing investment and consumption, thus implementing contractionary policy.

Answer:

D. Increase interest rates