Expansionary monetary policy occurs when
A) a central bank acts to decrease the money supply in an effort to stimulate the economy.
B) Congress and the president increase taxes in an effort to stimulate the economy.
C) Congress and the president decrease taxes in an effort to stimulate the economy.
D) a central bank acts to increase the money supply in an effort to stimulate the economy.
E) a central bank acts to increase government spending in an effort to stimulate the economy.

Question

Quizplus · Accepted Answer

Expansionary monetary policy occurs when a central bank acts to increase the money supply in an effort to stimulate the economy. This can be achieved through various methods such as lowering interest rates, buying government bonds, or reducing reserve requirements for banks. The goal of expansionary monetary policy is to encourage borrowing and investment, which in turn can lead to increased economic growth and job creation.

Expansionary Monetary Policy Occurs When