What term describes a policy stance that favors raising interest rates to combat inflation?

• A. Neutral
• B. Dovish
• C. Aggressive
• D. Hawkish

Answer: (D)

Raising interest rates to fight inflation signals a hawkish stance in monetary policy. When prices are rising, policymakers tighten by lifting the policy rate to cool borrowing, spending, and overall demand, which helps slow inflation. This approach prioritizes price stability and accepts slower growth or higher unemployment in the short term to keep inflation in check. Dovish describes easing to spur growth, neutral means no tilt toward tightening or easing, and aggressive refers to the intensity of action rather than the standard label for the stance. So, the best term for this stance is hawkish.