Why is the slow growth that can result from a contractionary policy a positive effect? A) It can increase interest rates. B) It can decrease available credit. C) It can increase the money supply. D) It can decrease inflation.
The correct answer is D (it can decrease inflation) as the central goal of all contractionary policies is reducing inflation.
Explanation:
While contractionary fiscal and contractionary monetary policies can increase interest rates (answer A) and decrease available credit (answer B), these are tools used to achieve a higher goal, rather than their final effects. Answers A and B may also be considered as the cons of contractionary policies. Answer C is incorrect because it is an example of either an expansionary monetary or an expansionary fiscal policy.
Aggregate demand is the people’s interest in the gross domestic product of a country that is known as GDP. Controlling it becomes essential as the economy goes through various stages of the growth cycle. Reducing deficit spending and increasing taxes allow the government treasury to prevent economic overheating. In diagrams below, this change is shown by a shift of the AD curve to the left or right, depending on the type of policy used.


Work Cited
"Why is the slow growth that can result from a contractionary policy a positive effect? A) It can increase interest rates. B) It can decrease available credit. C) It can increase the money supply. D) It can decrease inflation." Custom-Writing, 2 Apr. 2020, custom-writing.org/qna/why-is-the-slow-growth-that-can-result-from-a-contractionary-policy-a-positive-effect/.
1. Custom-Writing.org. "Why is the slow growth that can result from a contractionary policy a positive effect? A) It can increase interest rates. B) It can decrease available credit. C) It can increase the money supply. D) It can decrease inflation." April 2, 2020. https://custom-writing.org/qna/why-is-the-slow-growth-that-can-result-from-a-contractionary-policy-a-positive-effect/.
Bibliography
Custom-Writing.org. "Why is the slow growth that can result from a contractionary policy a positive effect? A) It can increase interest rates. B) It can decrease available credit. C) It can increase the money supply. D) It can decrease inflation." April 2, 2020. https://custom-writing.org/qna/why-is-the-slow-growth-that-can-result-from-a-contractionary-policy-a-positive-effect/.
References
Custom-Writing.org. 2020. "Why is the slow growth that can result from a contractionary policy a positive effect? A) It can increase interest rates. B) It can decrease available credit. C) It can increase the money supply. D) It can decrease inflation." April 2, 2020. https://custom-writing.org/qna/why-is-the-slow-growth-that-can-result-from-a-contractionary-policy-a-positive-effect/.
Reference
Custom-Writing.org. (2020, April 2). Why is the slow growth that can result from a contractionary policy a positive effect? A) It can increase interest rates. B) It can decrease available credit. C) It can increase the money supply. D) It can decrease inflation. Retrieved from https://custom-writing.org/qna/why-is-the-slow-growth-that-can-result-from-a-contractionary-policy-a-positive-effect/
References
Custom-Writing.org. (2020) 'Why is the slow growth that can result from a contractionary policy a positive effect? A) It can increase interest rates. B) It can decrease available credit. C) It can increase the money supply. D) It can decrease inflation'. 2 April.