As a result of expansionary monetary policy,
A)both aggregate expenditure and aggregate demand increase
B)both aggregate expenditure and aggregate demand decrease
C)aggregate expenditure increases and aggregate demand decreases
D)aggregate expenditure decreases and aggregate demand increases
E)aggregate expenditure remains unchanged; aggregate demand increases

Question

Quizplus · Accepted Answer

Expansionary monetary policy involves increasing the money supply and lowering interest rates, which leads to increased borrowing and spending. This increase in spending leads to an increase in aggregate expenditure and aggregate demand.

As a Result of Expansionary Monetary Policy