Which of the following sequences of events represents an expansionary monetary policy?

Question

Quizplus · Accepted Answer

Expansionary monetary policy involves actions by the central bank (like the Federal Reserve in the United States) to increase the money supply and lower interest rates, which in turn stimulates economic growth. Option B accurately describes this process: the Fed buys securities on the open market, which increases the money supply, lowers market interest rates, and ultimately increases aggregate demand.

Which of the Following Sequences of Events Represents an Expansionary