Advocates of aggressive monetary policy contend that the key factor affecting the economy's performance is __________.
A)the federal funds rate
B)inflation
C)the money supply
D)tax expenditures

Question

Quizplus · Accepted Answer

Advocates of aggressive monetary policy believe that the key factor affecting the economy's performance is the money supply. They believe that by increasing the money supply, the central bank can stimulate economic growth and reduce unemployment. This can be done through measures such as lowering interest rates, buying government bonds, and increasing bank reserves. The goal is to encourage borrowing and spending, which can help to boost economic activity. In contrast, monetary policy that is too tight can lead to a contraction in the money supply, which can lead to economic slowdowns and recessions.

Advocates of Aggressive Monetary Policy Contend That the Key Factor