Although slight growth has occurred, many economic indicators show that the economy has been sluggish in recent months. What monetary policy option can be imposed to spur economic growth?

Question

Quizplus · Accepted Answer

The best monetary policy option that can be imposed to spur economic growth is to increase the money supply and reduce the discount rate. This will stimulate borrowing and increase spending, which in turn will boost economic activity and promote job creation. Cutting the deficit (A) and increasing the balance of trade (C) are fiscal policies that can potentially impact the economy in the long term, but they are not immediate, short-term solutions. Offering tax breaks for certain economic activity (D) could also help spur growth, but it is not as effective as monetary policy in stimulating the economy.

Although Slight Growth Has Occurred, Many Economic Indicators Show That