An expansionary monetary policy raises firms' cash flows by ________ interest rates.

Name: An expansionary monetary policy raises firms' cash flows by ________ interest rates.
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Question

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An expansionary monetary policy usually involves lowering nominal interest rates, which then results in lower real interest rates. The lower interest rates make borrowing cheaper for businesses and households, increasing their purchasing power and overall spending. This, in turn, raises firms' cash flows.

An Expansionary Monetary Policy Raises Firms' Cash Flows by ________