If the Fed promises to conduct a(n)________ for several years,then inflationary expectations will be ________.
A) contractionary monetary policy; high
B) expansionary monetary policy; high
C) contractionary fiscal policy; high
D) expansionary fiscal policy; low

Question

Quizplus · Accepted Answer

If the Fed promises to conduct an expansionary monetary policy for several years, it means that they will continue to increase the money supply and keep interest rates low for an extended period. This will lead to an increase in spending and investment, which can lead to higher inflation. Therefore, inflationary expectations will be high.

If the Fed Promises to Conduct A(n)________ for Several Years,then