Expansionary monetary policy is achieved by:

Question

Quizplus · Accepted Answer

Expansionary monetary policy involves increasing the money supply to stimulate economic growth. This can be achieved by increasing the amount of bank reserves, which in turn makes it easier for banks to lend money and increases the money supply. Lowering the federal funds rate also encourages borrowing and lending, which further increases the money supply and stimulates economic activity. Therefore, decreasing the amount of bank reserves and raising the federal funds rate (answer B) is actually contractionary monetary policy, which reduces the money supply and slows economic growth.

Expansionary Monetary Policy Is Achieved By