Expansionary monetary policy will result in

Question

Quizplus · Accepted Answer

Expansionary monetary policy involves increasing the money supply, which will lead to a decrease in interest rates. This is because there is more money available to borrow, so lenders will lower interest rates to remain competitive. However, expansionary monetary policy can also lead to increased inflation and an increase in aggregate demand, so options B and C are incorrect. Option D is also incorrect as expansionary monetary policy is a tool used by central banks to stimulate the economy, so it does not necessarily result in a loss of credibility. Therefore, the best choice is A.

Expansionary Monetary Policy Will Result in