Question : The Monetary Policy Committee maintained a hawkish stance on the interest rates. In this context, the 'hawkish stance' means_____.
Option 1: interest rates were decreased
Option 2: interest rates were increased
Option 3: interest rates were kept unchanged
Option 4: money supply was increased
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Correct Answer: interest rates were increased
Solution : The correct answer is interest rates were increased.
In the context of monetary policy, a "hawkish stance" means that policymakers, such as the Monetary Policy Committee (MPC), are advocating for or implementing policies that aim to control inflation or reduce the money supply. Hawkish policies often involve raising interest rates to curb inflationary pressures or cool down an overheating economy. The term hawkish is used to describe a more aggressive or vigilant approach to monetary policy to ensure price stability and control inflation, even if it may slow down economic growth.
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