Multiple Choice
In the early 2000s, Ecuador suffered high inflation because the central bank was financing a government deficit. In terms of fiscal and monetary policy, what created the problem of inflation was that Ecuador's:
A) fiscal and monetary policy were expansionary.
B) fiscal policy was expansionary, but its monetary policy was contractionary.
C) fiscal policy was contractionary, but its monetary policy was expansionary.
D) fiscal and monetary policy were contractionary.
Correct Answer:
Verified
Correct Answer:
Verified
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