Expansionary monetary policy involves actions that _______ the money supply in order to _______ aggregate demand.
A) decrease; decrease
B) increase; decrease
C) decrease; increase
D) increase; increase

Question

Quizplus · Accepted Answer

Expansionary monetary policy involves actions that increase the money supply in order to increase aggregate demand. This can be achieved through actions such as lowering interest rates, increasing government spending, or buying government securities. By increasing the money supply, individuals and businesses have more money to spend, which increases aggregate demand and stimulates economic growth. Choice D is correct because it correctly identifies the actions that increase the money supply and increase aggregate demand.

Expansionary Monetary Policy Involves Actions That _______ the Money Supply