Respuesta :
Expansionary monetary policy involves increasing the growth of the money supply.
What is Expansionary monetary policy?
Central banks may boost a weakening economy and GDP by implementing expansionary monetary policy.
Reduced reserve requirements for banks, a reduction in interest rates, and the purchase of government assets are the three expansionary monetary policy tools available to the Federal Reserve.
The objective of an expansionary monetary policy is to facilitate borrowing and spending by individuals and businesses, both of which serve as economic stimulants.
The rise, recession, and subsequently recovery of modern capitalist economies are recurring occurrences. The business cycle refers to this recurrent pattern of the economy.
The contractionary phase is characterised by a drop in the gross domestic product (GDP), which may result in an extended period of economic decline. By implementing an expansionary monetary policy, a country's central bank will encourage growth to counteract the downturn.
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