A shift to a more expansionary monetary policy will
A) increase the long-term growth rate of the economy.
B) reduce the future rate of inflation.
C) Stimulate output and employment almost immediately.
D) Stimulate output and employment, but only after a time lag that is generally long and variable.

Question

Quizplus · Accepted Answer

Expansionary monetary policy can stimulate output and employment, but it typically takes time for the effects to be felt in the economy due to delays in how monetary policy impacts spending and investment decisions.

A Shift to a More Expansionary Monetary Policy Will