Which of the following is an example of an expansionary monetary policy?
A) Government purchases of goods and services decline.
B) Government purchases of goods and services increase.
C) The bank rate is lowered.
D) The bank rate is increased.

Question

Which of the following is an example of an expansionary monetary policy?  
A) Government purchases of goods and services decline. 
B) Government purchases of goods and services increase. 
C) The bank rate is lowered. 
D) The bank rate is increased.

Quizplus · Accepted Answer

Lowering the bank rate is an expansionary monetary policy, as it encourages borrowing and spending by lowering the cost of borrowing. A decrease in government purchases of goods and services is a contractionary fiscal policy, not a monetary policy. An increase in government purchases of goods and services, as well as an increase in the bank rate, are also contractionary monetary policies.

Which of the Following Is an Example of an Expansionary