Don’t get confused with the 1st line of the question.
The question is asking us what will happen if central bank reduces the target overnight interest rates.
so, fall of interest rates is expansionary monetary policy; and expansionary monetary policy results in inflation. Hence OPTION C
Is the answer Option C ?
Yes
Don’t get confused with the 1st line of the question.
The question is asking us what will happen if central bank reduces the target overnight interest rates.
so, fall of interest rates is expansionary monetary policy; and expansionary monetary policy results in inflation. Hence OPTION C