Government are known to set u different policies to regulate the economy. Suppose the government decides to intervene to bring the economy back to the natural level of output by using Expansionary monetary policy.
- Expansionary monetary policy is known to expand the money supply faster than normal or even lower short-term interest rates.
It is known to be set up by central banks and comes about through open market operations. etc
This monetary policy often increases the money supply in an economy.
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