A central bank decides to implement a tightening (contractionary) monetary policy stance to curb inflationary pressures in the domestic economy. Which of the following combinations of policy actions represents a purely monetary policy response that achieves this objective?
An increase in the main policy interest rate combined with an increase in the top rate of personal income tax
A sale of government bonds in the open market combined with an increase in the commercial bank cash reserve ratio
A purchase of government bonds in the open market combined with an increase in the main policy interest rate
An increase in the main policy interest rate combined with a reduction in public sector spending on infrastructure projects
