Multiple choice

Dear money policy means

  1. money available with difficulty

  2. money available at high interest rate

  3. both (1) & (2)

  4. neither (1) nor (2)

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Dear money policy refers to a tight monetary policy where credit is restricted and expensive. Money becomes available with difficulty (due to restrictions) and at high interest rates (due to policy-induced rate increases). This is contrasted with cheap money policy where credit is easily available at low rates. Both conditions - difficulty in access and high cost - characterize dear money.

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