Expansionary monetary policy occurs when ________in an effort to stimulate the economy.
A) a central bank acts to decrease the money supply
B) Congress and the president increase taxes
C) Congress and the president decrease taxes
D) a central bank acts to increase the money supply
E) a central bank acts to increase government spending

Question

Quizplus · Accepted Answer

Expansionary monetary policy involves increasing the money supply in order to stimulate economic growth. This is typically done by a central bank, such as the Federal Reserve in the United States, through actions such as lowering interest rates or purchasing government securities. Option D is the only choice that refers to increasing the money supply, making it the correct answer.

Expansionary Monetary Policy Occurs When ________In an Effort to Stimulate