If the central bank of a country responds to economic contractions by adopting an expansionary monetary policy,________.

Question

Quizplus · Accepted Answer

An expansionary monetary policy involves increasing the money supply and lowering interest rates in order to encourage borrowing and spending, which leads to increased access to credit. Government spending does not necessarily fall during an expansionary monetary policy, and tax rates may or may not increase, depending on other factors being considered. Therefore, option B is the correct answer.

If the Central Bank of a Country Responds to Economic