If the Federal Reserve wants to cause a recession to end, it will choose ______ monetary policy to cause _____ to:
A) an expansionary; aggregate demand; rise.
B) an expansionary; short-run aggregate supply; rise.
C) a contractionary; aggregate demand; fall.
D) a contractionary; short-run aggregate supply; rise.

Question

Quizplus · Accepted Answer

An expansionary monetary policy is used by the Federal Reserve to stimulate the economy by increasing aggregate demand, which can help end a recession.

If the Federal Reserve Wants to Cause a Recession to End