Expansionary monetary policy is:
A) reducing interest rates by increasing money supply.
B) increasing interest rates by increasing money supply.
C) reducing interest rates by decreasing money supply.
D) increasing interest rates by decreasing money supply.

Question

Quizplus · Accepted Answer

Expansionary monetary policy is a policy that is implemented to stimulate economic growth and activity by increasing the money supply and reducing interest rates. This is done to encourage borrowing and spending, which in turn stimulates the economy. Therefore, reducing interest rates by increasing the money supply is the correct choice for expansionary monetary policy.

Expansionary Monetary Policy Is