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    Contractionary policies

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    How might this adage be relevant to expansionary (as opposed to contractionary) monetary policy?

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    It is widely agreed that monetary policy has an asymmetric impact on the economy. Contractionary policies seem to work wonders in the sense that they are better off in achieving the stated goals, while exapansionary policies are not as successful. This is very similar to the adage that you can take the horse to the water, but you cannot make the horse drink the water. The idea is that you can provide the market with what you think is most needed, ...

    Solution Summary

    Contractionary policies are contextualized.