Which of the following is an expansionary monetary policy?
A)The Federal Reserve increasing the discount rate for commercial banks
B)The Federal Reserve increasing commercial bank's reserve requirements
C)An increase in taxes imposed by the government
D)The Federal Reserve buying government bonds from commercial banks
E)A decrease in government's expenditures

Question

Quizplus · Accepted Answer

An expansionary monetary policy aims to stimulate economic growth and increase money supply. When the Federal Reserve buys government bonds from commercial banks, it injects more money into the system, which encourages lending and spending. This ultimately leads to economic growth.

Which of the Following Is an Expansionary Monetary Policy