________ policy is when a central bank acts to increase the money supply in an effort to stimulate the economy.
A) Expansionary monetary
B) Expansionary fiscal
C) Contractionary monetary
D) Contractionary fiscal
E) Countercyclical monetary

Question

Quizplus · Accepted Answer

Expansionary monetary policy is when a central bank, such as the Federal Reserve in the United States, increases the money supply by buying government bonds or lowering interest rates. This is done in an effort to stimulate economic growth by encouraging more borrowing and investment, which in turn leads to increased spending and aggregate demand.

________ Policy Is When a Central Bank Acts to Increase