In the short run, expansionary monetary policy ________ real gross domestic product (GDP),
________ unemployment, and ________ the price level.
A) raises; lowers; raises
B) raises; raises; raises
C) lowers; lowers; raises
D) lowers; lowers; lowers
E) raises; lowers; lowers

Question

Quizplus · Accepted Answer

Expansionary monetary policy increases the money supply, which typically lowers interest rates, stimulates investment and consumption, raises real GDP, reduces unemployment, and increases the price level due to higher demand.

In the Short Run, Expansionary Monetary Policy ________ Real Gross