If a government wanted to use monetary policy to increase economic growth,which of the following steps should be taken?
A)Decrease interest rates to increase the amount of money in supply.
B)Increase the amount of foreign currency kept on reserve in U.S.banks.
C)Increase the amount of public revenue for investment by raising taxes.
D)Increase government spending on public works projects.

Question

Quizplus · Accepted Answer

Decreasing interest rates will encourage borrowing and investment, which will increase the amount of money in circulation and stimulate economic growth. Increasing the amount of foreign currency reserves or public revenue will not necessarily lead to increased economic growth, and raising taxes could potentially have a negative impact on consumer spending. Increasing government spending on public works projects could have a short-term boost to the economy, but it may not be sustainable in the long run.

If a Government Wanted to Use Monetary Policy to Increase